Joining Colorado and California and some other jurisdictions, New York City this year passed the Salary Disclosure Law intended to promote pay transparency and equity. The law takes effect on Tuesday, November 1, 2022, and it significantly alters the obligations of most employers in New York City – and many outside NYC as well.
What is it?
The Salary Disclosure Law provides, in relevant part, that “[i]t shall be an unlawful discriminatory practice for an employment agency, employer, or employee or agent thereof to advertise a job, promotion or transfer opportunity without stating the minimum and maximum annual salary or hourly wage for such position in such advertisement.” The law thus requires employers to disclose a pay range when advertising any employment opportunity. The City Human Rights Commission ("CHR"), which will oversee compliance, advises that the range cannot be open ended although the minimum and maximum salary may be identical. Thus, an advertisement that offers an hourly wage of “$15 per hour and up” would not comply. The range may extend from the lowest to the highest annual salary or hourly wage the employer in good faith believes at the time of the posting it would pay for the position. More on “good faith” below.
While “advertisement” is not defined, the CHR advises that an “advertisement” is “a written description of an available job, promotion, or transfer opportunity that is publicized to a pool of potential applicants” and it covers all ads regardless of medium, including postings on internal bulletin boards, internet advertisements, printed flyers distributed at job fairs, newspaper advertisements, etc. Importantly, advertisements must comply regardless whether they are seeking full- or part-time employees, interns, domestic workers, independent contractors, or any other category of [protected] worker.
Does it apply to my business?
Highly likely. The requirements apply to any employer with four or more employees.[1] Owners and individual employers count toward the four employees, and those four employees do not need to work in the same location, and they do not need to all work in New York City. As long as one employee works in New York City, the workplace is covered.
You are not covered if you are a temporary help firm, but, if your company works with a staffing company, your company is still covered. Likewise, the law does not apply to employment positions that “cannot or will not be performed” in New York City. This means if you are located anywhere, but have an employee working in or remotely from New York City, this likely applies to you. We will be monitoring how it plays out, but for now, the assumption is you must comply so long as at least one person works from NYC.
Does it have teeth?
Yes. Current employees of an offending employer may file a complaint with the CHR or bring suit in state civil court. The CHR advises that offending employers “may have to pay monetary damages to affected employees, amend advertisements and postings, create or update policies, conduct training, [and] provide notices of rights to employees or applicants” among other things.
CHR will not impose a monetary penalty for the first violation, provided the employer cures the violations and documents with the CHR within thirty (30) days of service of the complaint. Failure to provide the requisite proof of cure may result in greater penalties. Note that submission of proof of cure is deemed an admission of liability by the express terms of the Salary Disclosure Law. But, failure to cure, or any subsequent violations, are subject to civil penalties up to $250,000.
How will it work?
You are of course still permitted to hire without using ads; you have no obligation to use employment advertisements.
“Salary” includes only base salary/hourly wage/rate of pay, regardless of frequency of payment. Meaning, ads must say a salary range ($50k-$75k) or an hourly wage ($15/hr-$25/hr). But, “salary” does not include other forms of compensation or benefits, such as bonuses, tips, overtime, stock, retirement contributions, PTO, or health, life, or other employer-provided insurance. Nothing prevents an employer from including any of this information in the advertisement, but it is not required by this law.
Much work also is being done by the phrase “good faith” which almost certainly will be the subject of litigation and further guidance over time. Given the tenor of the CHR and local courts, caution is advised and employers are warned to err on the side of setting accurate ranges; hiring someone outside the range will be highly suspect. Employers should take this opportunity to review their job descriptions and determine the salary range in good faith. Some documentation of the consideration for such ranges likely will be valuable in the event of a dispute.
Employers immediately should review their internet presence – job postings on LinkedIn and other sites fall squarely within the purview of the law. It may be prudent for employers to begin complying with the law even if they currently do not have an employee working from NYC, as the trend is for more of this, not less.
As always, the Gordon & Rees New York Employment team is ready to discuss with you.
[1] Consistent with the NYCHRL, the CHR advises that the Salary Disclosure Law also applies to employers with “one or more domestic workers.”