The New York State Pay Transparency Law (Senate Bill S9427A) (which was enacted on December 21, 2022 and amended March 3, 2023) is set to take effect September 17, 2023. The new law impacts employers, employment agencies, employees, and agents thereof employing four or more employees.
New York State Pay Transparency Law Requirements
All of those impacted entities may not advertise a job, promotion, or transfer opportunity that will be performed physically, at least in part, in the State of New York (including a job, promotion, or transfer opportunity that will be performed physically outside of New York but reports to a supervisor, office, or other work site in New York) without disclosing the following:
-
The compensation or a range of compensation for the job, promotion, or transfer opportunity; and
-
The job description for the job, promotion, or transfer opportunity (if a description exists).
An employer must keep and maintain necessary records to comply with the law’s requirements, including, but not limited to, the history of compensation ranges for each job, promotion, or transfer opportunity and the job descriptions for the positions, if the descriptions exist.
The term “advertise” is defined as “to make available to a pool of potential applicants for internal or public viewing, including electronically, a written description of an employment opportunity.” Within the law, a “range of compensation” means the minimum and maximum annual salary or hourly rate that the employer in good faith believes to be accurate at the time of the posting of an advertisement for a job opportunity. For positions compensated solely on a commission basis, employers can comply with the law by including a general statement that compensation will be based on commissions.
With respect to the law’s coverage, both internal and external job opportunities are covered. Temporary help firms are excluded from compliance.
Employers are prohibited from refusing to interview or hire, or otherwise retaliating, against any applicant or employee who exercises rights under the statute.
The law does not supersede or preempt any provisions of local law, rules, or regulations. Thus, covered employers with operations in other states, or New York City, will need to comply with all applicable state and local laws. Notably, New York City, Westchester County, Albany, and Ithaca are some of the jurisdictions that have similar laws in place.
Employers who fail to comply with the law may face civil penalties up to $3,000, depending on employer size, good faith, gravity of the violation, and history of previous violations. Any person aggrieved by a violation of the statute can file a complaint with the New York Labor Commissioner, but there is no private right of action for an employee to file a lawsuit against the employer.
Pending New Jersey Wage Transparency Bills
New Jersey employers should be aware that similar bills have been proposed in the New Jersey Legislature. Assembly Bill No. 3937, if enacted, would require transparency concerning compensation with promotion opportunities and in employment listings. Similarly, Assembly Bill No. 4285 would require certain salary, compensation, and benefit information to be included in certain postings.
Takeaways
In light of these laws that have been enacted (NY) and proposed (NJ), employers should:
-
Consider implementing standard pay ranges/guidelines for each position/classification;
-
Make sure that any salary guidelines or requirements for any bonus (whether it is based on merit, productivity, sales or commissions) are well documented and based on fair, objective, predictable, and measurable criteria;
-
Closely evaluate the pay ranges for current positions and make an effort to understand the level of each job position, the type of work involved, and competitive market data;
-
Assess their existing job postings or create new ones (including internal opportunities for promotions and transfers) and ensure they incorporate the job descriptions and the pay ranges;
-
Make sure to note in each job posting where the position will be performed;
-
Ensure that each job posting complies with the broadest applicable laws; and
-
Conduct a self-evaluation equal pay audit/pay equity analysis to address any pay disparities and to suggest revisions to existing compensation, if needed.
This summary is for informational purposes only and is not intended to constitute legal advice. This information should not be reused without permission.
