By Rachel H. Khedouri, Esq.
Across the nation, a growing number of jurisdictions are requiring employers to publicly disclose salary information in their hiring and, in some cases, promotion processes as a means to attempt to narrow gender and racial pay gaps. On January 15, 2021, the New York City Council followed suit and adopted a new lawmaking it an “unlawful discriminatory practice” under the New York City Human Rights Law (section 8-107 of the Administrative Code) for employers to advertise a job, promotion or transfer opportunity without identifying the minimum and maximum salary for each position advertised. The new rule is slated to go into effect on May 15, 2022, or sooner upon the promulgation of rules by the New York City Commission on Human Rights (the “Commission”).
The City’s new pay transparency requirement applies to all employers with four or more employees, as well as employers of domestic workers, freelancers, and independent contractors, regardless of size. The new law does not apply to job ads for temporary employment at temporary help firms as these firms are already required to provide pay range information after interviews under the New York State Wage Theft Protection Act.
In stating the minimum and maximum salary for a position, employers may provide a range that extends from the lowest to the highest salary that the employer — “in good faith” — believes it would pay for the advertised position.
The new law leaves some open questions, including whether it is intended to apply to New York City employers seeking to hire remote workers outside of the city or to employers elsewhere hiring for remote positions that may be performed (even partially) in New York City and whether “salary” is intended to encompass more than just base compensation paid on an annual basis (such as bonuses or commissions). We expect guidance from the Commission to be forthcoming, so stay tuned.
Multistate employers looking to post open positions or promote current employees should be aware that similar laws exist in California, Colorado, Connecticut, Maryland, Nevada, Rhode Island (effective January 1, 2023), and Washington, along with the cities of Cincinnati and Toledo, Ohio. Pay transparency legislation also is under consideration in Massachusetts, New York State, and South Carolina. Employers must review each law closely as there are important variations.
Complicating matters for employers are scenarios concerning the hiring of remote workers where, for example, two competing pay transparency laws exist: one in the Company’s headquartered state and one in the location of the potential candidate.
Given the complexity of these laws and their impact on hiring and other practices, our team is available to assist. If you have any questions ,please reach out to the NFC Attorney with whom you typically work or call us at 973.665.9100.