New York City’s New Pay Transparency Law: What Employers Need to Know

By: Richard M. Reice

Starting November 1, 2022, employers with four or more employees who advertise jobs for full or part-time employees in New York City must include a good faith minimum and maximum salary range or hourly wage for every job, promotion, and transfer opportunity, provided the work is performed in whole, or in part, within the five boroughs of NYC.

The minimum four employees who form the basis for the law’s application do not need to work in the same location, or all work in New York City. Owners and individual employers count toward the employee requirement, as do independent contractors, part-time employees, paid interns and domestic workers. In its enactment of Local Law 32, NYC joins California, Colorado, Connecticut, Maryland, Nevada, Rhode Island and Washington in enacting such pay transparency laws.

Any employment opportunity advertisement that would be performed in New York City is covered by the new law. An advertisement, be it on a job board, in a newspaper, or on a website, is a written description of an available job, promotion or transfer opportunity that is publicized to a pool of potential applicants. Such advertisements are covered regardless of the medium in which they are disseminated. Covered listings include postings on internal bulletin boards, internet advertisements, printed flyers distributed at job fairs, and newspaper advertisements. Job postings for temporary employment or positions that cannot, and will not, be performed in NYC are excluded from the law’s requirements. In addition, an employer need not post an advertisement before hiring externally or selecting an existing employee to fill a position. Employers should know that the salary range cannot be open ended, so language such as“$25 per hour and up,” or “maximum $75,000 per year” are not permissable. If the amount is fixed, by a labor agreement and there is no range, the advertisement can simply state the fixed amount.

The law does not prohibit employers from hiring without using an advertisement or require employers to create an advertisement in order to hire. Good faith means the salary range an employer is willing to pay a successful applicant at the time of advertising. Salary means regular base pay and does not include insurance benefits, paid time off, overtime, tips bonuses, etc.

Failure to comply with NYC’s salary transparency law is a violation of the NYC Human Rights Law. The NYC Commission on Human Rights enforces the law. Employers who violate the law are subject to paying monetary damages (if any) to adversely affected individuals and being directed to amend advertisements and postings, create or update policies, conduct training, provide notices of rights to employees or applicants, and engage in other forms of affirmative relief.

An employer will receive a warning for a first complaint of noncompliance, provided the employer shows it cured its noncompliance within 30 days of receiving the warning. An employer may have to pay civil penalties up to $250,000 for an uncured first violation and any subsequent violations.

Compliance Steps

There are numerous steps employers can take to ensure compliance with the new legislation:

1. Adjust their advertisements. That may include engaging in a holistic view of salaries and job classifications within their organization and market, and undertaking the necessary due diligence to appreciate the highs and lows for a particular job in their locale and industry.
2. Educate managers on the law’s requirements and the penalties for non-compliance. Make sure recruiters are giving the company the information it needs to comply.
3. Consider how compliance with the NYC law may impact job postings throughout the organization and review all postings—both internal and external.
4. Consider conducting a pay equity audit to ensure there are no significant discrepancies that may be revealed once a company is required to post salaries. Often courts will recognize a self-evaluation privilege so that employers can engage in corrective action in order to become compliant with the relevant laws and regulations without fear that their actions will be used against them. However, this privilege is not assured. Thus, working with legal counsel on the audit is important in order to preserve confidentiality when analyzing potential legal claims.

If you have any questions about the new law, please contact Richard Reice or the Cohen Seglias attorney with whom you regularly work.