NYC’s Pay Transparency Law Celebrates Its Third Anniversary — But Has Yet To Be Tested in Court

More than three years ago, in November 2022, New York City joined a growing number of municipalities and states (like Colorado) that enacted various forms of pay transparency laws. Like many of the other statutes put in place during this time frame, New York City’s law was designed to advance the goal of pay equity and to protect all New Yorkers from potential unlawful employment discrimination.

The first restriction of the law, codified at N.Y.C. Admin. Code § 8-107(25) prohibits inquiries during the hiring process about an applicant’s salary history. Specifically, the rule precludes employers from asking about, relying on, or otherwise verifying a job applicant’s salary history at any point during the hiring process. Under the law, it remains appropriate, however, to discuss more generally an applicant’s salary expectations and, if the applicant voluntarily chooses to share their salary history, an employer may consider that information. The second aspect of NYC’s pay transparency law (found at N.Y.C. Admin. Code § 8-107(32)) relates to job postings and requires employers with four or more employees to provide an annual salary or hourly wage range in all job advertisements, including internal postings for promotions and transfer opportunities. The range provided must be based on the employer’s good faith assessment of what it actually would pay for the position at the time of the posting.

When this law first became effective, it was a hot topic among New York City employers and was the source of much anxiety because, under the law, employees are given a private right of action in civil court. Employers were legitimately concerned about an onslaught of litigation. The reality over the past three years, however, seems to indicate that this concern was somewhat unfounded. There has been almost no civil litigation arising from New York City’s pay transparency law. In fact, it remains to be seen how New York courts will construe the language of the code or, critically, how the civil penalties and damages will be assessed and imposed.

To be sure, the New York City Commission on Human Rights (the Commission) has brought dozens of enforcement actions against businesses in almost every industry one can think of — hospitality, food and beverage, retail stores of all kinds, media outlets, technology companies, law firms, nonprofits, and employment agencies, to name just a few. These cases, however, while instructive regarding the scope and nature of the infractions addressed by the Commission, have all been privately resolved without a public decision and order of the Commission. Therefore, they do little to illuminate the contours of the pay transparency law or the penalties involved with such claims.

What can be extrapolated from the cases brought by the Commission so far is that no violation is too small to be addressed. For example, one of the enforcement actions identified only two job postings that failed to provide a good faith salary range. Similarly, another complaint alleged that a salary range spanning only $94,000 (for a highly compensated individual) was too wide to pass muster under the current law. Finally, the Commission appears to have pursued compliance and penalties from a business with a job application that sought salary history information that was used to vet candidates for one open role (although the Commission’s pleading did at least argue that the application was likely to have been used by the business for other positions).

Given type of enforcement actions that have been brought to date, businesses with employees in New York City are well-advised to stay strictly compliant with the letter of the city’s pay transparency law to avoid an action by the New York City Human Rights Commission. Further, while we wait for employee-filed cases to be adjudicated in New York courts, employers can monitor developments in enforcement actions through the NYC.gov website. For the time being, these enforcement cases will remain the best insight we have into New York City’s pay transparency law.