New York City issues guidance on new salary range law

As we wrote here and as you probably have seen all over the news, New York City has passed a law requiring employers to include salary ranges in job postings.

The City’s Commission on Human Rights has just issued much-needed guidance on the new law. That guidance answers some questions but not all. Here is a summary:

• What is the effective date? The law will take effect on May 15. By that date, employers must include a “good faith” salary range for every job, promotion, and transfer opportunity that it advertises.

• Which employers are covered? All employers who have four or more employees are covered by the law. The four employees do not need to work in the same location. Nor do they do all have to work in the City. As long as one employee works in the City, the employer is covered.

• Which workers are covered? Full-time employees, part-time employees, interns, domestic workers, and independent contractors are all covered by the law.

• Does it apply to employment agencies and temporary help firms? Employment agencies are covered by the law, regardless of their size. The law does not apply to temporary help firms but does apply to employers who work with temporary help firms.

• Which job listings are covered? Any advertisement for a job, promotion, or transfer opportunity performed in whole or in part in one of the five boroughs of the City (Bronx, Manhattan, Queens, Brooklyn, and Staten Island)-whether from an office, in the field, or remotely from the employee’s home-is covered by the law. An “ad” is defined broadly to include any “written description of an available job, promotion, or transfer opportunity that is publicized to a pool of potential applicants.” So this definition will cover external job postings online, internal job postings on your intranet, printed flyers at job fairs, and even newspaper ads.

• What information must be included in the job ads? Employers must provide the minimum and maximum salary that they in good faith believe at the time of posting they are willing to pay for the job. “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).”

• Can the salary range be open ended? No. This means the ad cannot say “$20 per hour and up” or “maximum of $40,000 per year.” But the ad can say “$20 per hour.”

• What does “salary” include? The ad needs to include the base wage (for example, $20 per hour) or base rate of pay (for example, $40,000 per year). You do not need to include any other form of compensation or benefit such as health/dental/vision/life insurance benefits, paid/unpaid leave benefits, retirement benefits, severance pay, overtime pay, commissions, tips, bonuses, or restricted stock units. You have the option, however, of including other forms of compensation and benefits if you would like.

• What are the risks for violating the law and the likelihood of exposure? The guidance states that the City Commission on Human Rights will investigate based on complaints filed by the public as well as its own independent research. If a violation is found, the City Commission on Human Rights may impose a civil penalty of up to $125,000, and up to $250,000 for a willful violation. They may also impose non-monetary relief, such as requiring employers to amend their job ads or to provide interactive training on the law to recruiting and HR personnel. There is also a risk of private lawsuits: failing to provide a salary range is considered an “unlawful discriminatory practice” under the City Human Rights Law. This means that prospective hires and internal candidates for promotion or transfer could file their own lawsuits and without going through the City Commission on Human Rights. Employers should expect serial filers and the plaintiffs’ bar to search LinkedIn, Indeed, Monster, ZipReruiter, and other job listing websites for violations and then send demand letters, or file administrative complaints or lawsuits, in an effort to get quick settlements. Unfortunately, other than the general damages guidelines above, there are no specifics on the potential damages, including for a single violation for a single job ad. Given the public interest in the salary range law, there is a large likelihood of exposure for non-compliant job ads.

If you have not done so already, we recommend training recruiting and HR personnel on the law and ensuring that all job ads, promotions, and transfer opportunities posted on and after May 15 comply. Creating the salary ranges should be a careful, thoughtful process that takes into account potential pay equity issues and the reality that your current workforce will see these ranges online and possibly on your intranet. It remains to be seen how much flexibility you will have in creating your salary ranges. Will a job ad offering, for example, $100,000 to $200,000 a year pass muster under the new law? The best practice is to make the salary range as close as possible to the minimum and maximum you are willing to offer in base wages or rate of pay.

Two City Council members have proposed amendments to the salary range law. Those amendments would, among other things, exempt employers with fewer than 15 employees and extend the compliance deadline for covered employers to November 1. The full City Council will review those proposed amendments, and we will keep you updated.

For a printer-friendly copy, click here.