Last week, on November 1, 2022, New York City’s pay transparency law became effective. The law amends the New York City Human Rights Law (NYCHRL) to make it unlawful for a New York City employer to advertise a job, promotion, or transfer without including the minimum and maximum salary for the position.
With the new law in already effect, some New York City employers have begun to publish salary/wage ranges in their open job postings. Others have not.
Here are key highlights for employers (including those that may think they are not New York City employers) to consider concerning the new law:
Additionally, with the new law already in effect, here are some issues we are seeing and are worth noting:
The law requires employers to post the "lowest to the highest salary the employer in good faith believes at the time of the posting" for a particular position. CHR guidance states that “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).” Perhaps there is some rational explanation for the above-referenced range, but it should remind employers to be ready to justify “good faith” for any chosen range.
To that end, employers should consider the salary/wages paid for the same or similar positions, and then document the reasons for the selected range. The law does not require the employer to stay inside the range, but again, employers should document the reasons for doing so (with an eye on ensuring the published range was set in good faith).
There are risks to this approach, and the “free pass” may not be so free. While the CHR may not penalize a first violation, that does not preclude current employees from pursuing claims in a private action against the employer. Moreover, the CHR free pass comes with an admission of liability “for all purposes.” It is not clear what that means, but a litigious employee would likely use such a determination to advance any litigation.
Employers outside of New York City need to be cognizant of the law’s potential reach, especially with respect to remote jobs that could be filled by persons living (and working from) New York City. Employers that post for such remote jobs and are otherwise covered employers under the law (i.e., have at least one employee or independent contractor in New York City, and at least four employees overall) should consider including compliant salary/wage ranges in postings for those jobs.
Pay transparency laws – including New York City’s law – may set traps for unwary employers. These laws are an ever-increasing reality across the United States, and could have an impact on multi-jurisdictional employers who are not based in a state or locality that has such a law. It is not too late to be prepared and undertake best practices, even in relation to New York City, where the law is already in force.