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NYC Has Issued Guidance on Pay Transparency Law

New York City’s (NYC) Pay Transparency Law requires that salary ranges be included in job postings. The law is scheduled to take effect on May 15, 2022, providing that the effective date is not pushed back due to proposed amendments.

As we previously reported, the law applies to all employers with at least four employees or one or more domestic workers in New York City; business owners and independent contractors are counted towards this threshold.  However, the law does not apply to temporary positions advertised by temporary staffing agencies.

The law requires that employers state the minimum and maximum salary they in good faith believe at the time of the posting they are willing to pay for the advertised job, promotion, or transfer opportunity; the range cannot be open-ended. However, employers are not required to include other forms of compensation or benefits offered in connection with the advertised job.

Failure to comply with these requirements makes it makes it an “unlawful discriminatory practice” under the New York City Human Rights Law (NYCHRL), and the New York City Commission on Human Rights (NYCHR) is authorized to take action to implement the law. Failure to comply may result in monetary damages and civil penalties of up to $250,000. In addition, covered entities may also be required 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.

In anticipation of the upcoming effect date, the NYCHR has issued guidance for employers in the form of frequently asked questions (FAQs). The FAQs provide additional information on the following five questions:

  1. Does this new law apply to my job postings?
  2. Which job listings are covered by the new law?
  3. What information must be included in covered job advertisements?
  4. How will salary transparency protections be enforced?
  5. What should I do if I have questions about these rights and obligations or would like to report discrimination?

Proposed Amendments that May Impact the Law

On March 24, 2022, some NYC Council members introduced a bill (Int. 134) that would amend the pay transparency law to:

  • Clarify that the law applies to both hourly and salaried positions;
  • Create a carveout of certain advertisements that would not be subject to the law;
  • State that the law would not be applicable to positions that are not required to be performed in NYC, “meaning that advertisements for remote positions or advertisements posted by NYC-based employers for roles in other locations would not need to include compensation information;” 
  • Exempt advertisements that simply state that an employer is hiring, without specifying a position from coverage under the law; and
  • Push back the law’s effective date from May 15, 2022, to November 1, 2022.

The bill is now under consideration by the full NYC Council, and if approved, it would take effect immediately.

Next Steps for Employers

Unless the proposed amendments are approved, employers should begin preparations to comply with the law on or before May 15. Employers should review both their external and internal recruiting practices, specifically, as it relates to posting of available positions. It may also be a good time for employers to look and their compensation practices to ensure that wage ranges for open positions are in line with industry and market data for competitiveness and retention of employees.

NYC is among one of many states and localities that have enacted similar laws, resulting in multistate employers needing to be cognizant of any other applicable state or local laws for workers in other jurisdictions.

HR Works will continue to monitor this topic and provide updated information as it becomes available.

HR Works, Inc., headquartered in Upsate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.