New York City recently enacted the Pay Transparency Act (the “Act”). As discussed below, effective May 15, 2022, employers in New York City will be required to disclose salary ranges when posting available positions for jobs.
In December 2021, the New York City Council passed legislation requiring New York City employers to include a maximum and minimum salary for all advertised positions. The purpose of the legislation of the Act was to combat inequality based on gender and race. It should be noted that this Act covers employers with four or more workers (including part-time and temporary employees, interns and independent contractors).
This new Act amends the New York City Human Rights Law (NYCHRL) by making it an “unlawful discriminatory practice” to not disclose the salary range in an advertisement for any position. In enacting this new law, New York City has followed other jurisdictions with similar legislation such as California, Colorado, Connecticut, Maryland, Nevada, Rhode Island and Washington. Significantly, the disclosure requirement of the Act covers not only external job advertisements but even includes internal company postings for available positions in the company.
As set forth in the text of the Act:
It shall be an unlawful discriminatory practice for an employment agency, employer, employee or agent thereof to advertise a job, promotion or transfer opportunity without stating the minimum and maximum salary for such position in such advertisement. In stating the minimum and maximum salary for a position, the range may extend from the lowest to the highest salary the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion or transfer opportunity.
Thus, the minimum and maximum salary listed in the advertisement must be the salary the employer believes in good faith it expects to pay for the position. However, the language of the new statute is unclear on various issues, including the following:
- whether the law applies to a position in a New York City company that one can perform its work remotely outside New York City
- whether it affects a non-New York City employer that places an advertisement directed to New York City applicants for a position outside New York City
- whether employers must annualize hourly or weekly wages for non-exempt positions to comply with the Act
Given these and other ambiguities of the Act, it is expected that the City will issue guidance on this new law prior to May 15, 2022, its effective date.
While the Act does not enumerate any specific penalties for violation of this provision, the New York City Commission of Human Rights (the “Commission”) is authorized to impose civil penalties of up to $125,000 per violation of the NYCHRL, and up to $250,000 if the Commission finds that such violation was willful, wanton or malicious.
In light of the Act, it would be prudent for New York City employers to take steps to ensure compliance with the impending new law. Specifically, employers should determine their policies for establishing salaries, begin setting salary ranges for all positions in the Company and plan to include such salary ranges in job advertisements which will run on or after May 15, 2022.
Finally, we anticipate that even non-New York City employers that are located in New York State should expect that the entire New York State will soon be bound by a law identical or similar to this Act given that such legislation to amend New York State Labor Law section 194-b has already been introduced in Albany and Governor Hochul has expressed support for such legislation.
Please contact Avi Lew (212-495-8133), a partner at Korsinsky & Klein LLP if you have questions about this Act or if you need assistance reviewing any of your employment policies, preparing or updating your employee handbooks, or for any questions you may have about employment law issues.