Effective November 1, 2022, Covered Employers posting jobs that are, or may be, performed in whole or in part in New York City must report a salary or hourly range in good faith under the New York Human Rights Act’s new salary transparency provisions ( NYCRL).
On May 12, 2022, New York City Mayor Eric Adams signed into law amendments to the New York Human Rights Act (NYCHRL) that now require wage transparency in job advertisements. This Pay Transparency Act will come into force on November 1, 2022.
The New York City Commission on Human Rights has issued guidance explaining that the employers covered by this law are those with four or more employees (including owners and independent contractors) or one or more domestic workers, provided at least one Employee or manual worker “works in New York City.” Whether this includes single-employee employers who only occasionally work in New York City is an open question at this point. Nonetheless, this appears to be a low hurdle for entry into the scope of the Act, and even very small employers have to abide by it.
As explained by the NYC Commission on Human Rights, Covered Job Opportunities include any advertisement (ie, a written description posted to a pool of potential applicants) for a job, promotion, or transfer opportunity that is being, or may be, held in whole or in part in New York City.
Information to Include
Covered Employers must now include in Covered Job Postings the minimum and maximum salary that they have a good faith belief at the time of posting that they are willing to pay for the advertised position, promotion or transfer opportunity. Open areas are not allowed. According to the law, the salary includes the basic annual salary, the hourly wage or the wage rate. Salary does not include other forms of compensation or benefits such as paid time off, commissions, bonuses or equity.
Plaintiffs will generally not be provided with a private plea for an alleged violation of this law. However, current employees have a private right of action to assert claims against their current employer relating to a non-compliant job posting, promotion or transfer opportunity with their employer.
In addition, the NYC Commission on Human Rights will receive and investigate complaints under this law. The Commission does not impose a penalty for a first complaint if the employer shows that he has remedied the violation within 30 days of receiving the notice from the Commission. Thereafter, affected employers may be required to pay civil penalties of up to $250,000 for an uncured first violation and all subsequent violations.
Pay transparency in the recruitment and hiring process is a growing national trend
Employers need to be aware that New York City is not alone in passing pay transparency laws that impact the recruiting and hiring process. Similar laws requiring wage transparency in job advertisements are already in effect in Colorado, Ithaca, NY and Jersey City, NJ, and similar laws will soon be in effect in Westchester County, NY (effective 11/6/22), California (effective 1/1/23). .) and Washington (valid from 1/1/23). The New York State Legislature also recently passed a similar law, which still has to be approved by the governor.
Pillsbury recently issued a warning regarding the new California law.
Employers must also ensure compliance with laws that require employers to provide salary ranges or related information at certain stages of the hiring process or at the request of an applicant. Such laws are or will be in effect in the following jurisdictions: Connecticut, Maryland, Nevada, Rhode Island (effective 1/1/23), Washington, Cincinnati, Ohio and Toledo, Ohio.
Next steps for employers
Employers should determine which of these laws apply to them and change their practices accordingly to ensure compliance. With respect to Covered Employers in New York City, prior to November 1, they should identify the positions they will be promoting that may be held in New York City and ensure that they include a good faith estimate of the annual salary range the hours offered for such positions in the respective job advertisements. With this increased focus on pay transparency, it is clear that pay equity will be a critical issue for employers in the years to come. Employers are therefore well advised to make efforts to ensure that they can demonstrate that their employees are paid fairly. Legal counsel can help ensure that employers are best placed to defend future enforcement actions, whether through an audit or other similar action.