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Article | Global News Briefs

United States: New York City enacts pay transparency law

Total Rewards|Wellbeing|Inclusion and Diversity
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By Jackie Rubin | March 30, 2022

Effective May 15, 2022, certain New York City employers must post salary ranges in job ads to promote pay equality.

Employer Action Code: Act

Law 2022/032 (the so-called Pay Transparency Law) amends Title 8 of New York City’s Administrative Code on Human Rights. Under the law, covered employers will be required to disclose proposed salaries in all job advertisements. The law’s key objective is to promote pay equality for certain segments of the labor force, such as women and minorities, who have historically received lower compensation. The law takes effect on May 15, 2022, 120 days following its enactment. Note that a bill introduced to the New York City Council on March 22, 2022, contains several significant proposed changes to the law, including deferral of the effective date to November 1, 2022.

Key details

  • The law applies to all companies with four or more employees where at least one of the employees is employed in New York City.  
  • The law does not apply to temporary staffing agencies looking for applicants to join the pool of available workers, but employers that work with temporary staffing agencies would be required to follow the law when posting for temporary jobs.  
  • An advertisement is defined as a written description of an available job, promotion or transfer opportunity that is published internally or externally to a pool of potential applicants.
  • An advertisement from a covered employer for a job that would be performed in New York City must include the minimum and maximum salary that the employer (in good faith) expects to pay for the position. Failure to do so will be considered an unlawful discriminatory employment practice subject to a penalty of up to $250,000; however, the law does not require employers to create an advertisement for hiring.
  • Salary does not include other forms of compensation or benefits, so it would not need to consider health benefits, life insurance, paid leave, retirement benefits, severance, overtime, bonuses or other types of compensation. 

Employer implications

Although preliminary guidance has been issued, more information is needed to clarify the scope of the law and the definition of a covered employer. As such, employers should continue to monitor developments and begin to assess the possible impact on both their recruitment and compensation practices.

The law is part of a growing national and global trend of governments promoting pay transparency as a means of supplementing existing equal pay laws. In many jurisdictions, legislation created to protect employees from enquiries into their salary history as prospective job candidates is evolving to focus on employers, obliging the publication or sharing of pay data previously considered confidential employer data. Exact requirements vary, but since 2018, California, Colorado, Connecticut, Maryland, Nevada and Washington state have all introduced such measures, and Massachusetts and New York state are currently considering similar legislation. In the European Union, a proposed directive on pay transparency is currently with parliament (see our July 2021 Global News Brief: European Union: Proposed directive on pay transparency for more details).

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