On Dec. 21, Governor Kathy Hochul signed the “New York Pay Transparency Law.” The purpose of the legislation is to eliminate pay disparities and discrimination through the increased transparency of advertising salary ranges. Do you have the processes in place to comply with this law?
Here's what you need to know about New York employers must post salary ranges in job ads in late 2023:
- Providing pay information is increasingly considered a best practice in the business community.
- Employers with 4 or more employees must comply with the new legislation.
- The state law requires that a job description be included in the job posting if one exists.
New York state has joined the trend of requiring employers to post salary ranges in job postings. On Dec. 21, Governor Kathy Hochul signed the “New York Pay Transparency Law.” This law requires employers to list salary ranges for all advertised jobs, promotions, and transfers.
The measure will affect most employers who do business in New York state.
According to figures available from state officials, women in the Empire State earned 86 cents for every dollar men earned in 2019.
Lawmakers said the purpose of the legislation is to eliminate pay disparities and discrimination through increased transparency by requiring employers to disclose compensation information. According to figures available from state officials, women in the Empire State earned 86 cents for every dollar men earned in 2019.
This new legislation goes into effect on Sept. 18, 2023.
Who must comply?
Employers with 4 or more employees must comply. The law doesn’t mention whether they must work in the state.
Employment agencies must comply with the new rule. However, the new law exempts temporary help firms.
Covered jobs under the New York State law
The law covers ads for jobs that “can or will be performed in the state of New York.”
Job posting requirements
Postings for internal and external jobs, promotions, and transfers must include:
- Good faith salary range. Employers must provide a minimum and maximum annual salary or hourly range. The numbers must be an accurate and “good faith” approximation.
- Job description. Employers must provide an accurate job description if one exists. If not, there isn’t a requirement the employer provide one.
Commission-based jobs, promotions, and transfers must include a statement that compensation will be based on commission.
The state law does not provide for a private right of action. However, individuals and job applicants can file a complaint with the New York State Department of Labor.
There are fines for noncompliance:
- A first offense can result in a $1,000 fine
- The second offense can result in a $2,000 fine
- A third offense can result in a $3,000 fine
Employers must keep records of the pay ranges for the positions and the job descriptions. The law does not specify how long the documentation must be saved.
The law forbids employer retaliation against applicants or employees who take advantage of the law.
Several business groups opposed the legislation.
Upstate United noted: “… Piling on more legislation will only serve to kneecap and confuse these business owners trying to comply with this onerous legislation,”
Upstate United, a business advocacy coalition composed of business and trade organizations, said the legal measure misunderstands how businesses operate. “If a business loses an employee in the IT department who has 10 years of experience and replaces him with someone who only has 2 years of experience, their pay will obviously differ. Piling on more legislation will only serve to kneecap and confuse these business owners trying to comply with this onerous legislation,” Upstate United noted on its website.
The group also noted that the law is unnecessary because New York employers are already subject to several state and federal laws regarding discriminatory pay practices.
Preemption of local laws?
The state law does not preempt local pay transparency laws, such as those enacted in New York City, Ithaca, and Westchester County. The Westchester County law, however, will expire in September when this state law goes into effect.
Differences between the NYC and NY state pay transparency laws
New York City has a pay transparency law. The New York City pay transparency law went into effect late last year. Employers, even those based outside the city, must comply with the legislation if they have 4 or more employees, 1 of whom works in the city, and they advertise in the metropolis to fill positions. Employers must post a “good faith” salary range for each job ad, promotion, or transfer opportunity that would be performed, at least in part, in the city.
Penalties for violation of the New York City law have the potential to be quite steep compared to the state law.
The state law is similar to the local law, but there are a few differences between the NYC law and the state law.
The state law requires that a job description be included in the job posting if one exists.
Penalties for violation of the New York City law have the potential to be quite steep compared to the state law. Fines can go as high as $250,000 for a first offense. However, there is a proviso of $0 for a first violation if the violation is corrected within 30 days.
The NYC law also allows workers to file a civil complaint against employers if they think the local law has been violated. State law does not create a private right of action.
Pay transparency laws across the country
Multiple states have enacted a number of new pay transparency laws in recent years.
- Colorado also requires pay disclosure in job postings. The state’s pay transparency law went into effect in 2021.
- California and Washington state have similar laws that went into effect at the beginning of the year.
More pay disclosure laws in job postings could be on the horizon. Several states are reportedly considering such a requirement.
Pay transparency laws are gaining steam. Providing pay information is increasingly considered a best practice in the business community. As a result, many employers are considering providing wage data even in places where doing so is not mandated by law.
Over half of the organizations surveyed by Willis Towers Watson last summer said they are considering or planning to disclose pay ranges—even if not mandated by the laws in the areas in which they operate.
Some employers may not view pay disclosure as a best practice. Nevertheless, those that post jobs that can or will be done in New York should adopt procedures and review their policies on job postings to ensure their rules comply with the new requirement.