On November 1, 2022, New York City’s pay transparency law went into effect, requiring most employers in New York City to post salary ranges in job advertisements, including postings for internal opportunities. The law, which Mayor Eric Adams signed in May 2022, is aimed at curing pay disparities and promoting pay equity.
The following highlights some issues that employers may want to consider in amending their hiring policies to comply with the new law.
Pay Range Disclosure
The law is a true pay disclosure law that requires employers with four or more employees, at least one of whom works in New York City, to disclose a minimum and maximum salary range in job advertisements, including postings for internal promotions or transfer opportunities.
According to guidance from the NYC Commission on Human Rights (NYCCHR), the law has a broad reach, applying to a variety of workers, including full- and part-time workers, domestic workers, independent contractors, and interns. The disclosure requirements further apply to both hourly and salaried positions. The law does not apply to temporary help firms that are seeking applicants to join their pool of available temporary workers, though employers that work with those firms must follow the disclosure requirements.
The disclosure requirements apply to jobs that can or will be performed in New York City, whether in an office, in the field, or remotely from the employee’s home, according to the NYCCHR guidance.
The New York City law covers job “advertisements,” meaning “a written description for an available job, promotion or transfer opportunity that is publicized to a pool of potential applicants,” according to the NYCHR guidance. The new law covers advertisements regardless of the medium (e.g., the internet, internal bulletin boards, or printed flyers). The law also covers for open position postings for internal promotions or transfer opportunities. However, nothing in the law requires employers to create an advertisement for a job, meaning companies could hire for positions without placing a job advertisement.
‘Good Faith Belief’
The law requires employers to disclose the pay range, meaning a minimum and maximum salary, based on a “good faith belief” of what the employer is willing to pay a successful applicant. Employers are not required to include other forms of compensation offered with the job, including bonuses, tips, and paid time off.
The NYCCHR guidance indicates that there are no monetary penalties for a first-time violation provided the employer can prove that it has cured the alleged violation within 30 days of receiving a complaint. However, following a first-time violation, the NYCCHR is empowered to impose civil penalties of up to $250,000. According to the NYCCHR guidance, employees may bring a right of action against their current employers for violations.
The pay transparency requirements can be complicated for employers, particularly those advertising nationally for jobs. The NYCCHR appears to be taking the position that the law will apply to fully remote positions because those positions potentially could be filled by someone living in New York City. Further, New York City is only one of several jurisdictions to pass pay transparency laws, including California, which may have different requirements.
Employers that may be hiring for jobs in New York City may want to conduct an internal pay audit before setting any salary ranges to be used to ensure pay equity and consistency. They may further want to train managers, recruiters, and human resources professionals on the requirements of the pay transparency law.
Ogletree Deakins’ New York office will continue to monitor developments with respect to Int. No. 134-A and its impact on the workplace and will post updates on the New York and Pay Equity blogs as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.