Tech

$4.5 billion DigitalOcean put a ‘short pause’ on posting jobs in Colorado over a new law that requires salary disclosures

  • DigitalOcean is putting a “short pause” on hiring in Colorado due to recent regulations.
  • The law says companies must disclose salaries in job postings, in part to reduce the gender pay gap.
  • Critics say the firm “should have been ready” to post salaries.
  • See more stories on Insider’s business page.

Cloud firm DigitalOcean has put a “short pause” on job postings in Colorado because of a new state law that requires firms to disclose salary information.

The law, which went into effect in January 2021, says companies must disclose salary and benefits in their job postings for positions in Colorado or remote positions that could be performed there. 

The upstart contender to Amazon’s cloud, which went public in March and has a market cap of $4.5 billion, was one of several companies that people publicly called out on Reddit for including a line in job postings about not hiring in Colorado.

The purpose of the law is, in part, to reduce gender pay gaps and critics bashed DigitalOcean and other firms like Drizly, Chime and Johnson & Johnson for trying to skirt the regulation. 

DigitalOcean removed the line from its job posting following the Reddit thread and Insider’s query about the line, which can be seen in the screenshot below:

DigitalOcean's job listing that reads, "This position may be done in NYC or Remote (but not in CO due to local CO job posting requirements)".

DigitalOcean’s job listing previously included a note about how the work couldn’t be done in Colorado.


DigitalOcean



“We decided to put a short pause on posting jobs in Colorado as we assessed the impact of the new law,” a spokesperson told Insider. “We currently have employees in Colorado and will continue to hire in Colorado. We will be updating our job postings within the next week to comply with this new law.”

This response was met with skepticism on Twitter:

“Bills don’t magically become laws overnight,” one user responded. “This is the difference between being proactive and reactive. Should have been ready to post before CO laws passed.”

Associate professor at Wharton University and employment expert Matthew Bidwell told Insider that companies may want to avoid publicly posting their salaries because it limits their “ability to negotiate different salaries for different applicants.”

Keeping salary information off postings also allows companies to offer the minimum that they expect a given candidate will accept, he added.

“Once the company has disclosed a salary, it will be difficult for them to pay much less than that salary to a successful applicant,” Bidwell said. “Even if that applicant had relatively less experience and would take the job for much less.”

In addition, companies may worry that making pay rates for different jobs public may cause discontent among workers who are paid less within the company, Bidwell said. 

That idea came up on social media too:

“One thing to note is, it’s not just that they don’t want you, the job seeker, to know the salary range,” one Reddit user wrote. “They don’t want their existing employees to see salary ranges. It’s a recipe for discrimination lawsuits, serious legal problems with shady H1B practices, and employees demanding fair pay adjustments.”

One Twitter user that appeared to be a DigitalOcean user called the firm out on Twitter:

Drizy, Chime, and Johnson & Johnson did not reply to Insider’s request for comment.



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