New York City’s salary transparency law mandates employers to disclose minimum and maximum salary ranges for publicly advertised jobs, including remote positions.
Employers must be ready for these changes, and Ogletree Deakins’ New York employment lawyers are keeping an eye on developments and expecting additional guidance from NYC.
Employers must post salary ranges.
New York City’s salary transparency law is scheduled to take effect on November 1. Employers must include “good faith” salary ranges with job advertisements, promotions, and transfers posted within New York City or that could be filled by workers living there. Furthermore, this legislation prohibits employers from asking applicants about their past salaries – an enforcement mechanism will be provided by the Commission on Human Rights of New York City.
This legislation will provide workers with essential pay data, curb discriminatory wage-setting and hiring practices, and level the playing field for women who only make 83 cents for every dollar men make. These disclosures will address gender pay gap issues, particularly among women of color, while giving a more accurate account of what it costs to recruit for and fill jobs.
Governor Kathy Hochul recently signed legislation (S.9427-A/A.10477) creating a state pay transparency law mandating that all covered employers list salary ranges when advertising jobs, promotions, or transfer opportunities. This State law will become effective as of September 2023 and does not preempt local laws passed in New York City, Ithaca, or Westchester County.
Amendments to the law have clarified that it applies only to positions advertised within New York City. It does not exclude fully remote classes performed outside the city as long as those individuals report directly to a supervisor who resides within its borders. Furthermore, employees who work remotely but visit New York offices periodically or irregularly for meetings, training, and other company business are included within its scope.
The law also removes the recordkeeping requirement, which would have created its violation of the law. Employers should still consider keeping accurate records of compensation ranges and job descriptions for advertised positions as best practice; failing to do so may incur civil penalties of up to $250,000. Luckily, for any first violations of the new law by employers that demonstrate they resolved them within 30 days, any subsequent offenses may incur fines of up to $25,000.
Employers must be able to back up the salary ranges.
Employers in New York City may soon be required to post salary ranges for all advertised job openings, promotions, and transfer opportunities as part of a national movement towards pay transparency, which aims to address decades of research that indicates salary secrecy is harmful to workers by keeping them from knowing what their colleagues earn and limiting their ability to demand fair compensation.
Employers must comply with the law by being able to substantiate the salaries claimed in their postings. This requires a comprehensive human resources system that tracks all pay information and allows for adjustments throughout the year; failing this, they risk a fine for noncompliance.
The NYC Law applies to any position performed within its boundaries, whether office-based or remote. Recent amendments to the law have clarified that it does not extend to roles conducted outside New York. Furthermore, employers must include reasonable faith salary range estimates in advertisements instead of providing specific numbers.
As the law’s practical date approaches, employers are still grappling with how best to implement it. According to Bloomberg reports, several major companies appear to have disregarded it when posting job ads that seem contrary to it; Citibank listed roles with salaries up to $2 Million but narrowed them after receiving public criticism. Meanwhile, Goldman Sachs removed all but one NYC role from their listings and replaced them with job posts reflecting new law regulations.
While the new law offers applicants many advantages, employers will also come under increased pressure to ensure their salary ranges are fair and non-discriminatory. This could disrupt corporate culture as employees struggle to adapt to new norms. Furthermore, it could make filling specific roles harder.
Employers must be able to show that the salary ranges are reasonable.
Complying with the new salary transparency law requires companies to publish minimum and maximum salaries for job listings available to job seekers and ranges based on reasonable faith estimates of what successful applicants might earn. This law also covers internal promotions/transfers and external job ads; it does not apply to positions requiring regular travel between locations for business reasons or remote work environments.
Employers must disclose salary ranges on any websites or social media channels where they advertise jobs, such as Facebook, Twitter, LinkedIn, career sites, and internal bulletin boards that advertise job fairs. However, the law does not mandate employers to reveal current employee salaries in this way publicly.
Employers that fail to comply with New York City Commission on Human Rights could face fines of up to $250,000; however, how the two agencies that investigate violations will enforce it remains unknown as neither responded to a request for comment about how it will evaluate ranges posted by companies.
Some experts argue that posting broad salary ranges will only confuse job seekers, potentially hindering efforts at recruiting top talent. “The spirit of this law is creating transparency,” according to Beverly Neufeld of PowHer New York, an advocate of its implementation.
But other experts argue that wide salary ranges are necessary in a tight labor market, where employers compete fiercely to attract talent. Furthermore, job ads may mislead job seekers by listing low-starting and high-end salaries that mislead job hunters into believing these figures represent what’s available at each position.
DLSS has clarified that the new law covers jobs open to anyone living within city limits who perform work there. In contrast, previously, it only applied to companies with at least four employees. Companies should take steps to understand this new law’s scope and comply with it efficiently and proactively.
Employers must be able to show that the salary ranges are not discriminatory.
Cities and states nationwide are increasingly mandating employers post salary ranges when advertising jobs, aiming to reduce pay disparities between men and women while creating greater transparency for job seekers. Employers must demonstrate that these salary ranges do not discriminate – otherwise, they risk legal action from employees and candidates.
New York City law mandates employers include an accurate salary range in all internal and external advertisements for jobs, promotions, and transfer opportunities in NYC. This includes internal bulletin boards, internet sites such as Monster.com or printed flyers distributed at job fairs and newspaper ads, and any job posting that could take place here, including independent contractor positions.
However, the new law does not require companies to adhere to their published salary range for applicants; rather it provides prospective employees with a general idea of what a company might offer before considering variables like signing bonuses, annual bonuses, and equity compensation packages.
Even though its enforcement remains uncertain, its costs are undeniable. The NYC Commission on Human Rights will investigate complaints. It can issue fines for violations – though the commission has yet to indicate how many investigations have been opened or what amount was collected so far in fines.
State law does not offer the same level of wage transparency enforcement. Instead, unlike its City counterpart, it allows the New York Department of Labor (NYDOL) to impose civil penalties against employers that fail to abide by wage transparency requirements; penalties can range anywhere from one thousand dollars for first violations up to two thousand for subsequent offenses and three thousand dollars if repeat offenses occur.
New York City businesses must now disclose salaries for open positions – regardless of their remoteness – to combat gender pay disparity; women currently make only 83 cents for every dollar men earn on average. This new law will take effect in 2023, so employers should start planning now.