All Tricks, No Treats: 250,000 Reasons Why Employers Must Act Quickly to Comply with NYC’s New Salary Transparency Law by November 1
Beginning on November 1, 2022, most employers advertising jobs in New York City, including Manhattan, the Bronx, Brooklyn, Queens, and Staten Island, will be required to include the salary range for every advertised job.
The new law, which amends the New York City Human Rights Law (NYCHRL), applies to employers with four or more employees (including owners and independent contractors) or one or more domestic workers. Importantly, the four employees do not need to work at the same location or worksite, nor must they all work in New York City. If an employer has four or more employees, at least one of whom works in New York City, the new law applies. For example, if a Connecticut employer has three employees working out of its Connecticut worksite and one employee working remotely out of New York City, the Connecticut employer is subject to the new law. While employment agencies are covered by the new law regardless of their size, advertisements for temporary help firms are generally excluded.
The salary transparency law applies to any advertisement for a job, promotion, or transfer opportunity that can or will be performed, in whole or in part, in New York City, whether from an office, in the field, or remotely from the employee’s home. “Advertisement” means “a written description of an available job, promotion, or transfer opportunity that is publicized to a pool of potential applicants.” The new law covers all types of advertisements regardless of the medium used, including postings on internal bulletin boards, internet advertisements, printed flyers distributed at job fairs, and newspaper advertisements, and of course, social media.
To comply with the new law, employers must specify “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. “‘Good faith’ means the salary range the employer honestly believes at the time they are listing the job advertisement that they are willing to pay the successful applicant(s).” For purposes of the new law, “salary” includes the base annual or hourly wage or rate of pay for the position, but does not include other forms of compensation or benefits, such as employer-provided insurance, paid time off, retirement benefits, overtime pay, commissions, tips, bonuses, stock, etc. While employers are free to include such information, the new law does not require it.
The NYC Commission on Human Rights (the “Commission”) is charged with enforcement of the new law, and non-compliance can result in significant liability for employers. According to recent guidance issued by the Commission, covered employers who violate the new law “may have to pay monetary damages to affected employees, 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.” However, it is also important to note that “[t]he Commission will not assess a civil penalty for a first complaint alleging a violation of the salary transparency provision, provided that the employer shows they have fixed the violation within 30 days of receiving the Commission’s notice of the violation.” However, “[c]overed employers may have to pay civil penalties of up to $250,000 for a[n] uncured first violation of the new law, as well as for any subsequent violations.” In addition to filing complaints with the Commission, employees may also file claims against their current employer in civil court.
In light of the above, covered employers should immediately review their New York City job postings as well as their organization’s job descriptions to ensure there are accurate salary ranges stated for each position. Employers should also review and update any job advertisements that were posted prior to November 1 which may be extended or reposted. Employers outside of NYC must also proceed with caution when advertising remote jobs that may be performed remotely in any location, including NYC.
Finally, employers operating both inside and outside of NYC should take this opportunity to determine whether any other similar state or local salary transparency or wage disclosure laws may apply to their job postings. For example, in 2021, Connecticut enacted a law requiring employers to disclose wage ranges to employees and applicants in an effort to broaden pay equity. Colorado, Maryland, and Nevada also have a similar law on the books, and comparable laws in California, Washington, and Rhode Island are set to take effect January 1, 2023. As the national trend toward salary transparency continues, employers with remote employees must be diligent to ensure that they are complying with the broad and often unique requirements imposed by applicable law.
Our Labor and Employment attorneys have been working closely with employers to navigate these types of issues and can assist your organization in understanding its obligations and maintaining compliance. Please contact any of our Labor and Employment Law attorneys for more information.