November 1, 2022, is nigh. The date is significant for most employers in the City of New York because NYC Local Law 32, the salary transparency law (“the Law”), takes effect on that day.
We have been discussing the trends in pay equity all year long, and if earlier advice hasn’t been taken by now, the time has come for New York City employers to put some new practices and procedures in place. We have been keeping a watchful eye on New York City’s Commission on Human Rights (“Commission”) for new guidance materials, but little has been published thus far. Here is what you need to know about the Law.
The Law Applies to Most NYC Employers
As amended and effective November 1, 2022, Local Law 32 adds new provisions to the New York City Human Rights Law. An employer with four or more employees (including owners) or one or more domestic workers will be covered by the Law if at least one employee works some of the time within New York City limits. The Law also includes independent contractors and family members of the employer working for the business as counting toward the threshold for a covered “employer.”
There Are Few Exclusions
Postings by temporary staffing agencies seeking workers to join their pool of temporary workers (or “temps”) not for specific job placement are not covered by the Law. Additionally, if the position cannot or will not be performed in New York City, then the Law does not apply—e.g., an NYC-based employer hiring for a position in its Pennsylvania satellite office is not required to comply with the Law.
Importantly, there is no carve-out for employers subject to collective bargaining agreements with labor organizations. Such employers would need to post a wage or salary range that comports with any contract or agreement governing the relevant advertised position.
Advertisements for Most Jobs in New York City Are Affected
Under the Law, it is an illegal, discriminatory practice to advertise a job, promotion, or transfer opportunity without stating the minimum and maximum annual salary or hourly wage that the employer believes, “in good faith,” it would pay for the position if the position will or could be performed, at least in part, within New York City. Accordingly, any notification about a job opportunity, except as noted above, must list the wage or salary range, regardless of the medium in which the notice appears. This would include:
- Memoranda on bulletin boards
- Window signs
- Newspaper listings
- Internet advertisements (whether on an employer’s own “careers” page or on a third-party job board)
- Internal employer “intranet” electronic job listings
- LinkedIn or other social media platform postings
The Law applies regardless of the type of job, whether part-time or full-time, and includes a range of position types, such as roles for interns, independent contractors, and domestic workers.
Amendments to the Law made clear that the requirement extends to postings for fully remote roles. The Law must be followed for any job posting for a position that can or will be wholly or partially performed inside New York City, according to a Fact Sheet published by the Commission in May 2022. Unless the job will specifically be performed in another jurisdiction, New York City employers must include the wage or salary range on the job posting. For example, a New York City-based company recruiting for an on-site facility manager in St. Louis, Missouri, would not be required to list a pay range for that position, presuming it could only be performed in St. Louis. Conversely, a business in St. Louis (with at least four employees, only one of which works in New York City) advertising a role that is based in New York City would have to include a minimum and maximum salary. Moreover, if that St. Louis-based employer advertises a fully remote position, that advertisement would also require the inclusion of a pay range since a person living in New York City could theoretically be a candidate for the job.
While no specific guidance has been issued relating to job postings that explicitly exclude NYC candidates from applying, the Colorado Department of Labor refuted a similar approach after the Colorado remote-job posting law was enacted in 2021.
What’s in a Salary—and What Isn’t?
The Commission’s Fact Sheet explains that each advertisement must give a minimum and maximum salary amount to be paid for each position advertised, either as an hourly rate or an annual salary. It is not sufficient to state only a base rate (e.g., $20 & up) or a salary cap (e.g., max. $75,000). If there is only one wage level available, then the advertisement must identify the rate of pay. It is not clear from the current guidance whether an employer must explicitly state that the minimum salary and maximum salary are identical figures (e.g., $20/hour to $20/hour) or if the employer may simply provide the rate of pay (e.g., $20/hour).
The range that must be disclosed in any posting or advertisement can be expressed as an hourly rate or as an annual salary. Although there is no restriction or prohibition on advertising the value of other forms of compensation, disclosure of such is not required. Thus, employers are not obligated to advertise the value of any benefits, such as employer-provided insurance, time off, retirement programs, commissions, bonuses (including signing bonuses), severance pay, overtime pay, or other forms of compensation.
If a Complaint Is Filed, Employers Have Limited Breathing Room
If the Commission receives a complaint about a job posting or advertisement that does not properly include salary range information, the Law requires that the employer alleged to be responsible for the unlawful advertisement be given an “opportunity to cure” before any penalty is imposed. However, this “opportunity” is rather limited. Employers may only remedy the first alleged violation to avoid a fine, and they must respond quickly; the window of opportunity closes only 30 days after the employer is notified that a complaint was filed. Take note that this timeline is distinctly different from that of the usual process for complaints in that an employer alleged to have violated the Law is essentially required to admit a violation and prove that the violation has been remedied prior to any investigation or determination.
An employer that is served a notice of a complaint alleging a violation of the Law may avoid a civil penalty if it is the first violation, and satisfactory proof that the violation has been cured is accepted by the Commission. As explained in the Commission’s guidance offering assistance to respondents, employers can submit proof that the violation has been fixed by submitting evidence, such as:
- copies, photographs, or other images of revised postings that include a good-faith salary range;
- a sworn statement attesting that allegedly unlawful postings have been removed or corrected; and
- documents or written statements showing that the employer, its employees, and/or its agents were not responsible for the alleged violation of the Law.
Proof must be submitted within 30 days of receipt of notice of a complaint and may be sent by mail or submitted electronically. Notably, submission of proof of a cure constitutes “an admission of liability for all purposes” under the Law. An uncured violation, as well as subsequent violations, may be subject to fines of up to $250,000. If the Commission rejects submissions and/or imposes a fine, employers have 15 days to appeal the decision.
Additional Liability Is Another Concern
While the Law, as amended, does not permit a private right of action by job applicants or others outside of an organization, it does permit a current employee to file a civil action for claims against their employer related to an allegedly non-compliant job posting or advertisement. Keep in mind that the Law applies to internally advertised job opportunities, even those as simple as a printed memorandum tacked to a workplace bulletin board or posted on a company intranet page. Thus, employers must be sure to maintain consistency with the Law’s requirements in communications about any job opportunity, even those that are internal transfers or opportunities for promotion, if the jobs are publicized to a pool of potential applicants, as stated in the Fact Sheet. However, the Law does not apply to directed letters offering a promotion or transfer opportunity to a specific individual.
What New York City Employers Should Do Now
All New York City employers that are or might be covered should take the following steps to ensure compliance with the Law:
- Review current staffing to determine if you are covered: If you have at least four employees and at least one employee in New York City, you are covered, and any position posted for a role that would be—or could be—fulfilled from within city limits must include the salary range. Keep in mind that owners and individual employers count towards the four employees, the four employees do not need to work in the same location, and they do not need to all work in New York City.
- Consider reviewing job descriptions and pay scales for all positions that are or could be performed in New York City. The Law requires “good faith” to back up an advertised salary range. If your business relies on market research or other tools to determine market rates for compensation, keep records of this data as evidence of due diligence and “good faith” in determining advertised wages.
- Carefully check the text of any advertisement, notice, memorandum, or other posting regarding any job opportunity at your business and ensure that it includes an appropriate salary or wage range. Open-ended phrases do not comply with the Law’s requirements. Instead, an ad should state a specified minimum and a specified maximum amount. Even if there is no flexibility or range in pay, and the wage is a fixed amount, guidance suggests that advertisements should list that amount as a minimum and maximum. While this could eliminate potential accusations of vagueness or intentional noncompliance, the same figure listed twice can look awkward, if not silly, so we anticipate some pushback on such a practice.
|NOT COMPLIANT |
Instead of this:
|“Pay starting at $15.00 per hour”||“Hourly wage min. = $15.00; max. = $18.00”|
|“Salary commensurate with experience, up to $75,000”||“Salary commensurate with experience, ranging from $50,000 to $75,000 annually”|
|“Paying $20 per hour”||“The minimum and maximum pay is fixed at $20 per hour”|
- Verify that all covered job postings (including postings on third-party job boards and those that had been issued to recruiters) published prior to November 1, 2022, have been updated to be compliant or are withdrawn.
- Be prepared for current employees to ask questions if positions are advertised with pay scales that exceed their own salaries. Some employers may consider getting ahead of potential concerns by implementing salary adjustments for valued employees.
- If operating in multiple jurisdictions, consider whether a uniform policy of pay transparency makes sense. If adopting a practice of disclosing wage ranges in all job advertisements, ensure that postings comply with all applicable state and local laws.
- Consider conducting a pay equity audit to identify potential equal pay claim risks from publicly disclosing pay ranges.
- Ensure that hiring managers and human resources professionals are trained about the Law’s requirements, aware of specifics with respect to advertised salary ranges, and prepared to respond to questions from candidates and current employees on the salary ranges.
- Understand that the advertised range is a “good faith” estimate but does not obligate an employer to make an offer within that range, especially if a candidate appears worthy of a higher amount. However, offering a lower amount than advertised, while not prohibited, might trigger inquiries or complaints and would have to be clearly justified by a non-discriminatory reason (e.g., a candidate does not yet possess requisite credentials but is in the process of obtaining them and is otherwise qualified for a role).
- Recall that other laws governing the hiring process in New York City still apply, including the prohibition on inquiring about salary history and the Fair Chance Act, which imposes strict procedures for conducting criminal background checks.
- When in doubt, consult with legal counsel.
For more information about this Insight, please contact:
|Susan Gross Sholinsky|
|Marc A. Mandelman|
|Robert J. O’Hara|
|Nancy Gunzenhauser Popper|
|Ann Knuckles Mahoney|