Tips for complying with NYC’s salary transparency law

In April 2022, the New York City Council passed an amendment, which endeavored to answer some (but not all) of these questions. The amendment, among other things, added “hourly wage” to the information that must be disclosed in an advertisement (if an employee is not paid on a salary basis), and that the position must be performed, at least in part, in New York City. In addition, the amendment limited a private cause of action only to current employees - in other words, applicants that see a job posting without a disclosed range cannot bring such a cause of action - and civil penalties to $0 for a first violation, provided that an employer demonstrated that it had cured the violation within thirty days after a complaint was filed.

Subsequent guidance issued by the New York City Commission on Human Rights (NYCCHR) in May 2022 clarified other open questions:

• What does 4 or more employees mean? For purposes of employer coverage, not all four employees have to work in the same location or even in New York City. Thus, an employer may have one employee working in New York City and still be covered by the law. “Employees” include owners and independent contractors. Employment agencies are also covered, regardless of size, but temporary staffing firms seeking applicants to join their pool of candidates are not.
• What is considered an “advertisement”? An “advertisement” is a “written description of an available job, promotion, or transfer opportunity that is publicized to a pool of candidates,” and includes, without limitation, postings on internal bulletin boards, the Internet, and printed flyers as well as in newspapers. Importantly, there is no requirement for an employer to “advertise” an available job, promotion, or transfer opportunity. Accordingly, employers may hire, promote or transfer without such an advertisement.
• Does the law apply to remote jobs? Yes. While the place of performance must be, at least in part, in New York City, performance could be in-person (e.g., at an office or client site) or remote (e.g., at home).
• How specific does the advertised salary or hourly wage range need to be? Certain ranges will simply not comply with the law, such as “$15 per hour and up” or “maximum of $50,000 per year.” These ranges do not comply because they do not include a minimum and maximum salary or hourly wage. However, employers are permitted to post “ranges” such as “$15 per hour” or “$50,000 per year” if there is no flexibility in compensation. This is permissible because, in effect, the minimum and maximum salary or hourly wage are the same, and thus there is no “range” between the two. Further, the law does not prohibit employers from offering a job, promotion, or transfer opportunity outside of the disclosed range, but the range must still represent what the employer in good faith believed at the time of the posting it would pay for the position.

• What is included as part of “salary”? Salary includes “the base annual or hourly rate of pay regardless of the frequency of payment,” but does not include other forms of compensation or benefits—for instance, paid time off, insurance and retirement benefits, bonuses, commissions, stock, etc.
• What are the penalties or remedies for noncompliance? Although civil penalties are limited where an employer timely cures a violation, the NYCCHR still has authority to require an employer to engage in forms of affirmative relief, such as pay money damages to affected employees, amend an advertisement, and provide employees notice of their rights. Moreover, an uncured first violation may cost an employer up to $250,000.

New York City is not the only municipality in New York State that has a salary transparency law; Westchester and Ithaca have adopted similar legislation. There is also currently pending legislation in New York State (which would require the disclosure of salary ranges in advertisements statewide). Other states have enacted similar laws, including California, Colorado, Connecticut, Maryland, Nevada, Rhode Island and Washington.

When the NYC law was first passed, a principal concern among employers was the anticipated fall out from current employees seeing posted salary ranges for the same positions that did not align with their current compensation. As we are still in the early phases of implementation, time will determine the true effect (if any) on current employees. Certainly, a posted salary or hourly wage range that overwhelmingly exceeds the current compensation of a similarly situated employee may give that employee greater leverage to request a raise. However, it is not uncommon to have differences in pay among employees that are based on legitimate factors, such as education and work experience, training, and skill level. Employers are reminded to continue to review and evaluate their current compensation practices to ensure that they are fair and equitable. It is also good practice to ensure that any salary representations in an advertisement are generally consistent with the current salary or hourly wage ranges for the same positions.

Marisa Sandler is an employment lawyer and litigator at Tannenbaum Helpern Syracuse & Hirschtritt LLP. Maryann Stallone, a partner at the firm, also contributed.

For more, sign up for The Drum’s daily US newsletter here.