New York City Passes Pay Transparency Law
As of May 15, 2022, employers in New York City advertising a job, promotion, or transfer opportunity must now publish the minimum and maximum salary range for the position.
The law, which amended the New York City Human Rights Law (NYCHRL), makes it an unlawful discriminatory practice to publish a job posting without the disclosure of pay information. The posting must include a salary range detailing the highest to lowest possible ranges of the salary based on the employer’s “good faith” understanding of the position. The law does not differentiate between jobs posted externally to the public and internally within the business, so employers should plan to comply with the new requirements for both internal and external job postings.
Impacted Businesses
The law covers all employers who have four or more employees in New York City, including independent contractors. The law fails to define the term “salary,” employers should plan to publish salary ranges for all types of positions including full-time, part-time, exempt, or non-exempt hourly. It is unclear how bonuses and other forms of compensation will be treated under this new regulatory landscape. The law makes clear, however, that it does not apply to temporary positions or to employers of domestic workers who are already required to post hourly pay no matter the size of the staff. The New York City Commission on Human Rights is tasked with enforcing the law. Violators will face civil penalties and fines.
Pay Transparency Laws On the Rise Across the Country
New York City’s pay transparency law is reflective of an increasing trend in the United States to raise awareness around wage gap and discrimination, which frequently impact women and people of color. This law is intended to be a means by which to expose pay disparities in the workplace. Many states and local governments are enacting laws similar in nature with the aim of increasing equal pay among their citizens and to address systematic pay inequities.
For example, Colorado passed perhaps the most comprehensive pay transparency law, requiring employers to disclose a compensation range in all job postings, benefits, and bonuses; including for remote work. Colorado employers with even one employee working in Colorado (even if their main hub is located out of state) are required to adhere to its provisions when placing job postings within the state.
Other states implemented laws requiring salary disclosure upon an employee or applicant’s request. For example, Maryland requires pay details upon the request of any applicant, while California only enforces the requirement after the applicant has completed an initial interview. In Nevada, salary range must be provided to any applicant who has interviewed, even without a request. Washington state only requires that salary information is provided after the applicant has received an offer. Connecticut requires the disclosure of salary information when the applicant requests it, or when an offer is made; whichever is earlier. Other states such as Massachusetts, Pennsylvania and South Carolina, are also considering passing similar statutes. With the varying degrees of requirements and provisions, employers would be well advised to seek legal help in deciphering these emerging laws if they engage in business in more than one state.
Employer Takeaways
- Employers in New York City should review and revise their policies ahead of May 15, 2022, when this law takes effect, ensuring all internal and external documents reflect consistent pay rates.
- Employers in New York City must disclose the low to high range of salary for posted job openings, promotions and transfers.
- Failure to comply with the requirements of the law may result in fines and penalties.
- Employers with offices in more than one state should monitor pay transparency laws in all jurisdictions where they do business. With the varying requirements and laws emerging in this area, it is vital to stay abreast of all developments.
- Employers should anticipate that current employees will seek to renegotiate salaries, if the employee’s salary does not match with the salary posted for similar-situated individuals in accordance with the new laws.
The attorneys at Wood, Smith, Henning and Berman stand ready to answer all of your questions regarding New York City’s pay transparency law as well as all similar laws across the country. We will provide updates to all of our clients and interested parties in changes in the law so businesses can plan and pivot accordingly to remain in compliance.