A law enacted by the New York City Council, in late December 2021, is scheduled to take effect on May 15, 2022, requiring employers to disclose a salary range for positions in all internal and external job postings. On March 22, 2002, the New York City Commission on Human Rights released a fact sheet titled “Salary Transparency in Job Advertisements” which provides guidance to employers on the NYC Salary Range Transparency Act.
A covered NYC employer employs four or more employees, including independent contractors, and employers with at least one domestic worker. The guidance clarifies that owners count towards the four-person threshold, and that all employees, regardless of work location, must be counted. So, as long as one of the employees works in NYC the workplace is covered by the law. Employment agencies are covered by the law, regardless of the size. However, the law does not apply to temporary help firms seeking applicants to join their pool of available workers, but employers who work with temporary help firms must abide by the law.
Covered Job Postings/Ads
The salary transparency law applies to internal and external advertisements for a job, promotion, or transfer opportunity. The guidance defines an “advertisement” as a “written description of an available job, promotion, or transfer opportunity that is publicized to a potential pool of job applicants”. The media in which these ads are disseminated are not fully defined, but can include internet ads, internal bulletin boards, flyers distributed at job fairs, and newspaper ads. The fact sheet also makes clear that employers are not obligated to advertise opportunities and also states that salary postings are not required for opportunities that are not advertised. Additionally, the law does not prohibit employers from hiring without using an advertisement or require employers to create an advertisement to hire.
Employers must include the minimum and maximum salary in each job posting, defined as the salary range an employer, in good faith, is willing to pay at the time of the posting for the advertised job, promotion, or transfer opportunity. “Good faith” is defined as the range of the salary the employer honestly believes it will pay a successful applicant. Open-ended ranges cannot be used in job postings, such as “$15 per hour and up” or “maximum $50,000 per year”. If there is no flexibility in the salary offered, the minimum and maximum salary may be identical. Only the salary range needs to be included in the posting. Other forms of compensation or benefits are not required to be included in the advertisement.
The NYC Commission on Human Rights is authorized to impose civil penalties up to $125,000, and up to $250,000 for willful violations of the law. Employers who violate the law may also have to pay monetary damages to affected employees and NYC employers may also be required to amend their 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.
Potential amendments and a delayed implementation could be on the way
On March 23, 2022, the NYC Council introduced an amendment to the law that would revise the current version to apply only to employers with 15 or more employees. The amendment would also extend the effective date to November 1, 2022. Additionally, the amended version would exclude from the law general notices that an employer is hiring without reference to any particular position. Lastly, and probably the most significant, is that the amended language carves out the applicability of the law for positions that are not required to be performed, at least in part, in NYC. This would mean that employers would not need to include the salary range for remote positions unless they are required to be performed in NYC, at least in part.
Employers should begin preparing for the May 15, 2022 effective date to ensure compliance with the pay transparency law’s requirements. PMP will keep you informed on any updates to the proposed amendments to this law.