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Pay Transparency Laws Are All The Rage: Looks Like New York State Is Joining The Party – Employee Benefits & Compensation

Pay transparency laws are catching fire in legislative bodies
around the country. As we have previously reported, these laws,
which target pay equity, have gone into effect in a number of
jurisdictions, such as Colorado and New York City in recent years.

New York State is one
of the latest to pass such a bill (on June 2, 2022) that requires
private employers in the state to publish salary or wage ranges in
all job postings. The bill, which has been
passed by the state legislature and awaits the signature of
Governor Kathy Hochul, will become effective 270 days after it is

With the bill effectively applying to very small businesses
(i.e., employers with four or more employees), companies
have reportedly asked Governor Hochul not to sign the bill into law
without first limiting its application to larger businesses.

In the meantime, here is what employers need to know about the

  • It applies to employers with four or more employees, which
    means only the smallest of employers do not have to comply (as well
    as temporary staffing firms, which are also excluded).

  • It applies to any advertising for any “job, promotion, or
    transfer opportunity” that “can or will be performed, at
    least in part, in the State of New York.”

  • Postings must contain:

    • Either the actual compensation, or a range of compensation, for
      the opportunity;

    • A job description (if a description exists); and

    • A general description of other types of compensation offered,
      e.g., fringe benefits, bonuses, stock options, or commissions.

  • Range of compensation will mean the minimum and maximum annual
    salary or hourly range of compensation for the opportunity that the
    employer in “good faith” believes to be accurate at the
    time of posting.

  • Postings for any opportunity paid solely on a commission basis
    will comply with the law provided it contains a general statement
    that compensation will be based on commission.

  • It requires employers to keep records needed to comply with the
    law, which may include the history of compensation ranges and any
    job description for each opportunity.

  • It includes anti-retaliation prohibitions protecting applicants
    or employees who for exercising any rights under the law.

  • For violations, employers are subject to civil penalties of up
    to $3,000; aggrieved employees have no private right of action but
    can file a complaint with the New York Commissioner of Labor.

The state law is similar to the New York City pay transparency
law currently scheduled to go into effect on November 1, 2022.
Still, it includes some additional items, including the
recordkeeping requirements and the need to include a job
description in a posting (if it already exists, i.e., it
does not have to be created for posting purposes).

Notably, because the state law (like the city law) applies to
any job that can OR will be performed in New York,
it appears to cover any posting for remote work, even outside of
New York because the job could be given to an applicant
who resides in New York.

As a result, the law could have an impact on an employer that
does not otherwise have an office or other physical presence in New
York. It may seem a legal and practical stretch that this New York
state law would have any real impact on an employer that has no
physical presence in New York state. However, those companies that
sell their products or services in New York, or employ any New
York-based employees (remote or brick and mortar) should take heed
of this law.

With the massive shift to remote work during and after the
COVID-19 pandemic, many businesses have become multi-jurisdictional
employers, often in ways that they may not recognize, especially
when a remote worker lives or moves to a state where the employer
has no other connection. Employers with remote workers need to
understand and apply various and often differing state laws that
impact complex policies and practices, including, for example, paid
leave time, sick/safe time leave, restrictive covenants, and, ever
increasingly, pay transparency.

These pay transparency laws come in a variety of shapes and
sizes. Other jurisdictions already have pay transparency laws on
the books that are similar to the New York State and city laws
(see, e.g., Washington, Colorado, and Jersey City (NJ)).
Elsewhere, there are laws that require employers to disclose pay
ranges, not on postings, but during the hiring process (see,
Connecticut, Nevada) or to applicants on request
(see, e.g., Maryland, Connecticut, and California).

Going forward, employers should expect to (and will) see more of
these laws come into effect in other states and localities
(including Rhode Island in 2023, and Ithaca, New York, in September
2022). As for New York state, assuming that Governor Hochul were to
sign the bill into law in the near future, it would not become
effective until mid-April, 2023.

While that would seem to give plenty of time for New York
employers to prepare for any change, there is a good chance that
long before then, they will have come up against a similar law
already in effect in another state or municipality. Thus, it seems
that it is never too late for New York and multi-state employers to
begin to:

  • Review pay levels, policies, and practices.

  • Review and change posting practices (as needed) for new hires,
    transfers, and promotions.

  • Review and change job descriptions (as needed) for use in

  • Review requirements with managers and administrative personnel
    who may need to understand them and their impact.

  • Conduct a pay equity audit – a process that might
    naturally coincide with an assessment of compensation ranges for
    posting purposes.

Whatever you do, keep your eyes and ears open for new pay
transparency law developments, which are likely to occur quickly
and anywhere, including in places that an employer may wrongly
assume is irrelevant.

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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