Ask HN: Why is Pave legal?

Article summary

Pave is a startup that helps companies with compensation by providing a collective breakdown of compensation ranges based on data from various companies. The author questions whether this is legal, comparing it to anti-competitive wage fixing. Pave connects to HR and payroll systems to gather data, which is then used to provide companies with compensation insights. The author is concerned that this could be used to suppress wages.

Main themes

• Wage Fixing
• Compensation Benchmarking
• Anti-Competitive Practices
• Labor Market Transparency
• Startup Ethics

What commenters say

• Sharing compensation data across companies does not necessarily constitute wage fixing, as companies can still decide to pay more or less than the prevailing wage.
• The intent behind sharing wage data is what matters, and if companies use it to decrease wages, it could be considered illegal.
• If all companies aim to pay at the same percentile, it could lead to wage inflation or stagnation, rather than fixing.
• Wage benchmarking companies can be used to allow bosses to claim they pay competitive wages, while actually paying lower salaries.
• The existence of similar products, such as ADP's compensation benchmarking, suggests that Pave's service is not new or unique.
• Some argue that transparency in wage data is necessary for a fair labor market, while others believe it can be used to suppress wages.
• The use of algorithms and data analytics in wage setting can lead to unintended consequences, such as stochastic wage fixing.
• The legality of Pave's service depends on whether companies are using the data to collude and fix wages, rather than making independent decisions.