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On December 21, 2022, Governor Hochul signed Bill A10477/S9427A, New York’s first
statewide pay transparency statute, into law. When the statute goes
into effect on September 18, 2023, New York State will join a
growing number of jurisdictions that have adopted pay transparency
laws. The New York State pay transparency law (“Law”)
requires employers to list compensation or compensation ranges and
job descriptions for all advertised jobs, promotions, and transfer
opportunities that can or will be performed in New York State,
including positions that are fully remote. According to Governor
Hochul, the Law seeks to “usher in a new era of transparency
for New York’s workforce” and tackle “pervasive pay
gaps for women and people of color.” The Law will not preempt
or supersede its New York City counterpart or any other local pay
transparency statutes.
Which Employers and Positions Are Covered by the Law?
The statewide Law applies to all employers with four or more
employees, including corporations, limited liability companies,
associations, and labor organizations. The definition of the term
“employer” within the Law applies to entities acting as
agents or recruiters but excludes temporary help firms. It is
unclear whether this exclusion applies to temporary help firms
generally (including as to their own recruiting for their own
employees) or limited to instances in which they are acting as
recruiters for other employers; perhaps this open question will be
answered by guidance from the New York State Department of Labor
(“NYSDOL”).
Employers must include the job description and compensation
ranges in job postings all open positions, including those that may
be filled through promotions or transfer of existing employees if
the job can or will be performed, at least in part, in the State of
New York. This means that even when advertising positions that are
fully remote, employers must comply with the Law because the
position could be filled by an applicant that is a New York
resident.
What are Employers’ Obligations?
Employers covered by the Law are required to include the
compensation or range of compensation and the job description for
the job, promotion or transfer opportunity in the job
advertisement. “Range of compensation” is defined as
“the minimum and maximum annual salary or hourly range of
compensation for a job, promotion, or transfer opportunity that the
employer in good faith believes to be accurate at the time of the
posting of an advertisement for such opportunity.” As a result
of their unique pay structure, advertisements for commission-based
positions are only required to include a general statement in
writing that compensation shall be based on commission. The Law
does not define “job description,” but employers are
required to include one “if such job description exists,”
likely meaning that employers will not be required to create job
descriptions just for advertisements if none already exists.
The Law also includes a recordkeeping requirement which
instructs covered employers to keep and maintain “necessary
records” including, but not limited to, the history of
compensation ranges and job descriptions for each job, promotion or
transfer opportunity. The law does not include a timeframe for the
recordkeeping requirement.
The Law protects both applicants and current employees by
prohibiting employers from refusing to interview, hire, promote,
employ, or otherwise retaliate against applicants and employees for
exercising their rights under the Law. Employees claiming to be
aggrieved by an employer’s violation of the Law are permitted
to file a complaint with the New York State Commissioner of Labor
(“Commissioner”).
Enforcement
While there is no private right of action created by the Law,
violations may subject employers to a civil penalty of up to $1,000
for a first violation, up to $2,000 for a second violation and up
to $3,000 for a third or subsequent violations. The NYSDOL will
conduct a public awareness outreach campaign to inform employers of
the provisions of the new Law, and the information will be made
available on its website. Additionally, the Commissioner will
promulgate rules and regulations to further clarify employer
obligations under the Law. Although the Law applies statewide, it
will not supersede or preempt any local laws or regulations.
Accordingly, New York employers located in jurisdictions with local
pay transparency laws are still subject to their requirements. For
example, New York City employers remain subject to the New York
City pay transparency law that went into effect on November 1,
2022.
Comparison of New York State and New York City Pay Transparency
Requirements
The New York State and New York City pay transparency laws share
several similarities. Both apply to employers with four or more
employees and cover remote positions that can be performed in the
relevant jurisdiction. Like the New York City law, the statewide
Law covers both external and internal postings but does not require
employers to advertise jobs, promotions, or transfer opportunities.
If an employer decides to advertise an opportunity, however, it
must comply with the relevant pay transparency law(s). In short,
employers who fill positions through a non-competitive process or
through succession planning are not required to post the position
they are filling. Both laws require employers to include the
minimum and maximum salary in job advertisements and rely on the
good faith of employers regarding the accuracy of the posted salary
ranges.
Conversely, the statutes differ in several important ways.
First, unlike the New York City statute, the Law does not include
advertisements for independent contractors or interns. Second, the
Law requires employers to include both a compensation range and a
job description in postings while the New York City statute only
requires employers to include a salary range. Third, unlike its
local counterpart, the New York State Law includes anti-retaliation
protections for applicants and employees. Finally, the New York
City law provides that aggrieved individuals may file a complaint
with the New York City Commission on Human Rights and also provides
a private right of action for current employees. In contrast, the
Law provides no private right of action but instructs aggrieved
applicants and employees to file a complaint with the
Commissioner.
Employer Takeaways
The NYSDOL will likely issue guidance in the coming months, but
employers are advised to work with counsel to review compensation
and posting practices for both internal and external job
advertisements. The impending requirements underscore, again, the
need for employers to conduct privileged pay equity analyses to
identify and rectify any pay disparities. If one is not already in
place, employers should establish a process for posting
advertisements that ensures compliance with state and local laws,
and train hiring managers and human resources personnel on the
posting requirements.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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