This year, California, New York, Washington, and Rhode Island joined the increasing number of states with pay transparency laws. Generally, these laws require employers to disclose salary ranges in public job postings and internally, to employees seeking promotions. Many believe that these pay transparency laws will stop employers from discriminating based on age, gender, race, or other unrelated criteria to offer different salaries to job candidates. If you have questions related to these laws and how they affect you, a qualified employment attorney can offer guidance.
The New York State Wage Transparency Law
The New York State (NYS) law recently went into effect on September 17, 2023. Now, employers with at least four workers are required to disclose salary ranges for any job advertised externally to the public or internally to workers interested in a promotion or transfer. Importantly, this law also will apply to remote employees who work outside of New York but report to a supervisor, office or worksite in the state. Employers who violate this law will be liable for civil penalties in an amount up to $1,000 for a first violation, $2,000 for a second violation and $3,000 for a third or subsequent violation.
The New York City Wage Transparency Law
The New York City (NYC) Wage Transparency Law went into effect on November 1, 2022, making it mandatory for employers to share the salary range or hourly wage in job postings. Notably, the law does not require disclosing other benefits, including paid time off, employer-provided insurance or overtime pay. Employers who violate the NYC law can be found guilty of “unlawful discriminatory practices” and may be required to pay a fine, undergo training or pay damages to the employee.
Similarities and Differences between the State and City Laws
The NYS law is similar to the NYC counterpart, but one notable difference is that the NYS law allows applicants to bring a suit against an employer who fails to disclose its salary range (as opposed to the NYC law, which only permits current employees to bring an action against an employer).
Another key distinction between the laws are the penalties on employers: under the NYC law, an employer has 30 days to correct the salary listing before they will be penalized; but the NYS law does not give employers a similar correction window.
The NYS law is clear that to the extent that the NYC law imposes stricter requirements on employers, those stricter NYC requirements apply to employers operating within the city.
How can Employers comply with these requirements?
To comply with these new requirements, employers should focus on the required skills and credentials for each role, to properly set a minimum and maximum salary range for all jobs listed after September 17, 2023. Employers should also educate staff members involved in the hiring process to make sure they are aware of the new requirements. Employee handbooks must also be updated to reflect these changes. Employers should save all materials they used to document salary decisions, including how they set the range for a particular role.
What other wage laws impact New York City and State employees?
Most private-sector employees across the country are protected under Section 7 of the National Labor Relations Act, which provides that employees may discuss how much they make, make joint requests for pay and even organize a union or have an outside union bargain with their employer to raise wages.
Employees should also be aware that both NYS and NYC have enacted salary history bans that make it illegal for employers to ask about an applicant’s salary history when applying to a job. These laws help prevent people who may have been underpaid at their previous jobs from being under-compensated in the future. Because of these laws, employers will have to rely on a candidate’s experience and qualifications when determining their compensation, not what someone else might have been paying them in the past.
- The NYC law applies whether the position is full-time, part-time or an internship, and even protects independent contractors.
- However, the NYS law does not protect independent contractors, unless they work through an employment agency.
Employers can still ask forward-looking questions about applicants’ salary expectations for their next job or talk about what the compensation for the open position will be. Applicants should be careful when volunteering information! If applicants provide their salary or benefits history on their own, without any questioning or prompting from the employer, the employer can use that information to consider the applicant’s new salary. Employers may also inquire about an applicant’s salary history if there are other local, state or federal laws allowing or requiring them to do so.
Conclusion
As states continue to grant greater workplace protections to employees, many hope that these types of salary disclosure laws will lead to pay equity across demographic categories. An experienced attorney can offer guidance on how the recent changes impact your business or your options as an employee. Contact a member of our team for next steps.
