By Rachel H. Khedouri, Esq.
*UPDATE on December 21, 2022 – New York Governor Hochul signed S9427A/A10477 establishing a statewide pay transparency law. The new requirements will go into effect in September 2023.
As we have alerted readers in prior eAlerts, a national trend has emerged to require employers to publicly disclose salary information whenever they post a job or upon request. Fueled by efforts to address gender and racial wage gaps, and commonly referred to as “pay transparency,” twelve jurisdictions across the country have existing or soon-to-be effective disclosure requirements, including seven states (California, Colorado, Connecticut, Maryland, Nevada, Rhode Island and Washington), and five localities (Cincinnati and Toledo, Ohio, and Ithaca, New York City, and Westchester County, New York). Jersey City, New Jersey has recently joined these ranks and New York’s statewide pay transparency law appears to be imminent.
Here is what employers need to know about new pay transparency obligations in the New York metropolitan area:
Jersey City, New Jersey
In March 2022, the Jersey City Council approved an ordinance requiring pay transparency by employers with their principal place of business in the city. Shortly thereafter, the Council amended the ordinance to broaden coverage to any employer with five or more employees within Jersey City on the date of the posting (regardless of principal place of business), employment agencies and agents of employers and to include any job posting or advertisement, including promotion or transfer opportunities and temporary positions. When considering headcount, companies must also include independent contractors working “in furtherance of the employer’s business”. Effective July 6, 2022, covered employers became obligated to disclose the minimum and maximum salary or hourly wage that they believe, in good faith, they would pay for the position as of the time of the posting. Although the original ordinance required employers also to disclosure benefits, the amendment removed this obligation.
Individuals can report violations to the Jersey City Office of Code Compliance (“OCC”) or to the Women’s Advisory Board for referral to the OCC, but do not appear to have a private right of action. The OCC may issue fines up to $2,000.
New York State
Readers of our eAlerts are aware that New York City enacted legislation earlier this year requiring employers to publicly disclose minimum and maximum salary ranges in job postings for positions that can or will be performed in that city, and that this legislation has been amended and postponed several times. (Click HERE, HERE and HERE for our prior eAlerts on this law.) The new law – which is now effective as of November 1, 2022 – requires employers with four or more employees (or one or more domestic workers) at least one of whom works in New York City, to post “good faith” salary ranges in any advertisement for jobs, promotions or transfer opportunities that can or will be performed in the city. Similar legislation was enacted elsewhere in New York earlier this year in both the city of Ithaca (effective September 1, 2022) and Westchester County (effective November 6, 2022).
This summer, statewide legislation passed the New York Senate and Assembly. If signed by the Governor, Senate Bill 9427A would amend the State’s Labor Law as of the 270th day after signing to prohibit employers with four or more employees (or their employees and agents) from advertising positions that can or will be performed in the state without disclosing compensation. Unlike other similar pay transparency legislation, the pending New York bill would allow employers to choose to disclose either a fixed level of compensation or a minimum and maximum annual salary or hourly range. Employers advertising for positions paid exclusively on commission can satisfy the disclosure requirement by including a general statement that compensation is commission-based. The New York state law also would require employers to provide the job description for the position – to the extent such description exists – and to keep records of the history of compensation ranges for each position and existing job descriptions. There is no affirmative obligation to create job descriptions. The legislation includes an anti-retaliation provision precluding employers from refusing to interview, hire, promote, employ or otherwise retaliate against an applicant or current employee for exercising rights under the pay transparency law. The state Commissioner of Labor will promulgate rules and regulations as well as conduct a public awareness outreach campaign.
Like the Jersey City ordinance, the New York law does not expressly create a private right of action. Violations of the law are subject to investigation and prosecution by the Commissioner and civil penalties not to exceed $1,000 for the first violation, $2,000 for the second violation, and $3,000 for the third and subsequent violations.
Next Steps for Employers
We will continue to monitor the status of the New York bill, as well as other jurisdictions that may jump on the pay transparency bandwagon. In the interim, employers should plan how they will comply with the various pay transparency laws. One option companies should carefully consider is whether to establish a process of disclosing pay information in all postings — even in those jurisdictions that do not require it — for consistency and ease of administration. Employers in New York State also should consider whether to review and revise existing job descriptions before having to include outdated or incomplete job descriptions in job posts.
If you need assistance preparing compliant job postings or job descriptions or have any questions on pay transparency laws, please reach out to the NFC Attorney with whom you typically work or call us at 973.665.9100.