By John K. Diviney, Esq. and Martin Schnabel
On December 21, 2022, Governor Hochel signed the New York State Pay Transparency Law to take effect on September 17, 2023.i The law generally requires employers to disclose in any job advertisement or posting the compensation range for each job, promotion or job opportunity and to provide a job description for the position, if one exists.
Coverage
The law applies to all New York employers as defined as any person, corporation, limited liability company, association, labor organization or entity employing four or more employees in any occupation, industry, trade, business or service, or any agent thereof; and also applies generally to employment agents and recruiters.
The Scope of Disclosures Requirements
The salary and job description disclosures are required any time an employer shall advertise a job, promotion or transfer opportunity that can or will be performed, at least in part, in the State of New York. This provision intends to expand the coverage to positions outside of New York, including “remote” positions provided that it “can” be or could have been performed in New York.
The Disclosure Requirements
The disclosure requires the identification of the salary or range of compensation for the position defined as “The minimum and maximum annual salary or hourly range of compensation for a job, promotion, or transfer opportunity that the employer in good faith believes to be accurate at the time of the posting of an advertisement for such opportunity.”
This standard affords employers some flexibility, as it is based upon the “good faith” belief of the employer at the time. The standard requires, as reflected in the employer’s Recordkeeping Requirements, that employers will need to review and maintain salary and compensation records to support their “good faith” salary determinations. It is anticipated these records will include the compensation of the same or similar positions and the history of compensation and salary rates for comparable positions.
Recordkeeping Requirements
The law requires that an employer shall keep and maintain necessary records to comply with the requirements of this section, including, but not limited to, the history of compensation ranges for each job, promotion or transfer opportunity and the job description for such positions, if such descriptions exist.
The New York State Department of Labor is charged with issuing regulations to clarify New York State employer requirements, and we can expect regulations prior to September 2023.
In the meantime, employers should start reviewing their salary and compensation policies and job description procedures to ensure compliance with the new laws when they go into effect. In addition, employers should keep in mind when reviewing their policies that the law will have the effect of disclosing salary ranges of positions, not just the applicant’s but also to current employees. One of the issues employers should be looking at now is how to mitigate the potential consequences the disclosure of salary ranges will have in their organization.
i At this time, there is a Pay Transparency Law for New York City in effect for New York City employers.
Written in collaboration with: