As we wrote here and here, the New York City Council passed a salary disclosure law, Int. 134-A, at the beginning of this year in an effort to increase salary transparency and decrease wage disparities based on gender, race, and other protected categories. The law will take effect November 1.
New York State lawmakers have now passed a similar bill requiring employers to disclose salary ranges and job descriptions in job postings. The bill is currently awaiting signature by Gov. Kathy Hochul (D), who is expected to sign. Assuming she does so, the bill would take effect 270 days later, or approximately March 2023.
The New York State bill
The New York State bill requires employers with four or more employees to disclose the compensation or range of compensation and job description, if one exists, for any advertised job, promotion, or transfer opportunity (referred to as “positions” through the rest of this bulletin) that can or will be performed, at least in part, in New York State. The bill also requires that advertisements for positions paid solely on commission disclose in writing a general statement that compensation will be based on commission. The bill excludes temporary help firms from compliance but includes employment agencies as well as their employees and agents.
In addition to disclosing compensation and job descriptions, employers must now maintain a record of the history of compensation ranges and the job descriptions, if such descriptions exist.
“Range of compensation” is defined as “the minimum and maximum annual salary or hourly range of compensation for [the position] that the employer in good faith believes to be accurate at the time of the posting of an advertisement for such opportunity.”
Any person aggrieved by a violation of this statute may file a complaint with the New York State Department of Labor. It is not clear yet whether applicants or employees can sue employers for alleged violations, but employers who violate the statute may be assessed civil penalties.
There are many unanswered questions surrounding the new statute, including whether it applies to ads for fully-remote jobs. But lawmakers have said that the New York State Department of Labor will issue regulations and conduct a public awareness outreach campaign to help employers become compliant.
Differences between the state bill and the NYC law
Although the New York State bill mirrors the recent New York City law in several ways, there are slight differences. Of course, the New York State bill covers the entire state, while the City law covers only the five boroughs (Bronx, Manhattan, Queens, Brooklyn, and Staten Island).
Moreover, in contrast to the City law, the state bill lacks a “notice and cure” provision. Under the NYC law, an employer who receives a first complaint from the New York City Commission on Human Rights will have 30 days from the date of service of the complaint to cure the violation and provide proof of cure. If the proof of cure is accepted by the Commission, there will be no fine. After the first violation, the Commission can issue fines of up to $250,000, and impose injunctive relief, which could include requiring employers to create policies, conduct training, and provide certain Commission-approved notices to applicants and employees. As the New York State bill stands, employers do not have an opportunity to cure their first violations.
Best practices for employers with employees in New York State
Given the likelihood that Gov. Hochul will sign this bill into law, we recommend that employers covered by the salary range law do the following between now and the tentative compliance deadline of March 2023. These best practices are very similar to what we recently recommended for employers covered by the City law:
- Determine what the salary ranges and job descriptions will be. Employers will need to figure out salary ranges and job descriptions for hourly and salaried positions, for prospective hires, and for current employees seeking promotions and transfers. Employers should also consider their preferred method for maintaining a record of the history of these salary ranges and job descriptions. The salary range histories should be kept in a confidential, password-protected document. Be sure that any job descriptions include the duties and responsibilities for the positions.
- Conduct a pay equity audit. The biggest concern for most employers will be the reaction of current employees to the public disclosure of salary information and their requests for higher pay. So there is no time like the present for employers to conduct pay equity audits. The audit should be aimed at finding and addressing any pay disparities that might violate the federal Equal Pay Act, Title VII, and state and local laws. The federal EPA applies only to pay discrimination based on sex, but Title VII and the New York State bill and City law prohibit pay discrimination based on race, sex, national origin, sexual orientation, and gender identity (among other categories). The standard for what constitutes “unequal” pay also differs among federal, state, and local law.
- Establish a complaint process. Talent acquisition specialists, human resources business partners, and hiring managers should establish a system that allows them to receive, document, and handle complaints from employees on salary postings and job descriptions in a consistent manner. They should also consider adding the following language to any complaint response: “The posted salary range for this position is based on several legitimate, non-discriminatory factors set by the company. The company is committed to ensuring equal pay opportunities for equal work regardless of gender, race, or any other category protected by federal, state, or local pay equity laws.
- Watch for updated guidance and new regulations. New York State lawmakers have said that regulations and guidance will be issued.
- Train HR. Employers should train their talent acquisition specialists, HR personnel, and hiring managers on the salary disclosure law and pay equity in general. Special focus should be placed on setting salaries in a way that is non-discriminatory and based on quantitative metrics (for example, years of experience) and qualitative ones (for example, job performance). Employers should also include training on other important pay equity laws, including the salary history laws of New York State, which prohibit employers from asking prospective and current employees about their salary histories.