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September 5, 2023
Update: On September 13, 2023, the Department of Labor for New York State published in the New York State Register proposed regulations regarding the State’s pay transparency law, which went into effect on September 17, 2023. The public comment period on the proposed regulations expires on November 12, 2023.
Among other things, the proposed regulations clarify that (1) the law applies to employees working outside of New York but reporting to someone in New York; (2) while the law does not apply to temporary help firms when they are hiring workers for their clients, it does apply to temporary help firms when they advertise employment opportunities at their own firm; (3) the pay range disclosures are required regardless of the medium in which employment opportunities are posted; (4) for employment opportunities covering multiple geographic locations or with differing levels of seniority, the employer must provide “multiple ranges of compensation for each individual opportunity”; (5) “compensation range” refers to base rate of pay; and (6) the disclosure requirement includes the range that employers legitimately believe they are willing to pay for the position.
On December 21, 2022, New York Governor Kathy Hochul signed into law a statewide wage transparency bill, which will require private sector employers in New York State to disclose salary ranges in all job postings and advertisements in an effort to end “pervasive pay gaps for women and people of color.” The new law, which is scheduled to go into effect on September 17, 2023, largely parallels similar pay transparency requirements recently enacted in several other states and localities.
Covered Employers
The law requires New York employers with four or more employees to disclose the compensation amount or range of compensation in any posting or advertisement for a job, promotion, or transfer opportunity. The law defines “range of compensation” as the minimum and maximum annual salary or hourly rate for the position that the employer in good faith believes to be accurate at the time of the posting. For positions that are paid solely on commission, employers must disclose a general statement that the compensation will be commission-based.
Covered Postings
In its original enacted form, the statute indicated that it applied to advertisements for any positions “that can or will be performed, at least in part, in the state of New York.” Importantly, however, on March 3, 2023, Governor Hochul signed into effect an amendment to the law that modifies its scope to instead cover postings for positions “that will be physically performed, at least in part,” in the State.
The amendment also extends applicability to postings for jobs that will be physically performed outside of New York but report to a supervisor, office, or other work site in New York. Consequently, any job postings for remote work, to the extent it can be determined that a particular role, in some manner, reports into a New York office or supervisor, will need to disclose the relevant pay range.
Additionally, the amendments define what it means to “advertise” a job – the action that triggers the salary range disclosure requirements. “Advertise” means “to make available to a pool of potential applicants for internal or public viewing, including electronically, a written description of an employment opportunity.” Based on this definition, the law applies to both internal and external job listings.
In addition to information on compensation, the law requires that all covered postings and advertisements contain a job description for the applicable position, if such a description exists. However, the law does not require that an employer create a job description to advertise a position.
Penalties for Violations
Employers that fail to comply with the law could face civil penalties up to $3,000. Anyone aggrieved by a violation can file a complaint with the New York Department of Labor, though the law does not expressly create a private right of action for an employee to file a lawsuit against an employer. Under the law’s anti-retaliation provision, employers are prohibited from refusing to interview, hire, promote, or employ, or otherwise retaliating against, any applicant or employee who exercises rights under the statute.
The law explicitly provides that it does not supersede or preempt local laws. Therefore, employers in New York City, Albany, Ithaca, and Westchester County, where pay transparency laws have already been enacted, will likely be less affected.
The law directs the New York Department of Labor to promulgate rules and regulations to effectuate and clarify the statute. Accordingly, employers can expect further guidance in the near future.
Next Steps for Employers
To prepare for the September 17, 2023 effective date, employers in New York should evaluate their compensation policies and determine accurate pay ranges for all positions where employees are working in New York. They also should review and revise any existing job posting templates to ensure compliance with the law, as well as train their Human Resources managers, recruiters, and hiring managers on the posting requirements.
*Special thanks to Brooke Palma, our Office Administrator, for her contributions to this article.
This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice. Always consult an attorney with specific legal issues.
