United States: The NYC Salary Transparency Law – Highlights

Pursuant to the NYC Salary Transparency Law (the "Transparency Law" or "Law"), which is effective November 1, 2022, employers advertising jobs, promotions, or transfer opportunities in NYC will be required to include a "good faith" salary range in their posting. Essentially, if employers choose to advertise a job, promotion, or transfer opportunity, and it is possible that someone in NYC may fill the role in whole or in part (i.e., in-person at the workplace, in the field, and/or remotely), then the employer must satisfy the requirements of the Law or risk being liable for a discriminatory practice under the NYC Human Rights Law ("NYCHRL").¹ Employers who violate the Law may have to pay monetary damages, may be subject to civil penalties of up to $250,000 per violation, and may have to provide other forms of affirmative relief.

Below is a more detailed summary of the requirements and some insights:

Which Employers Are Covered?

Employers with four or more employees or one or more domestic workers are covered by the Transparency Law. All of the employees do not need to work in the same location or in NYC - as long as one employee works in NYC, the employer is required to comply with the Law. Note that owners and individual employers count towards the four-employee threshold. Employment agencies are also covered under the Law, regardless of their size.

Although temporary help firms themselves are exempt from the Law's provisions, NYC employers who work with temporary help firms are covered and are thus required to comply with the Law. For reference, "temporary help firms" are defined as "businesses that recruit, hire, and assign their own employees to perform work or services for other organizations, to support or supplement the other organization's workforce, or to provide assistance in special work situations."

Employment agencies are also covered by the Law, regardless of their size.

Which Advertisements Are Covered?

The Transparency Law covers any advertisement for a job, promotion, or transfer opportunity that can or will be performed in NYC, whether in whole or in part, and regardless of whether the job would be performed in an office, in the field, or remotely from the employee's home. For purposes of the Law, an "advertisement" is defined as "a written description of an available job, promotion, or transfer opportunity that is publicized to a pool of potential applicants," regardless of the medium in which it is disseminated (i.e., on the internet, printed flyers, bulletin boards, newspapers, etc.). Postings are covered regardless of whether they seek full- or part-time employees, interns, domestic workers, independent contractors, or any other category of worker protected by the NYCHRL. Notably, the Law does not prohibit employers from hiring without using an advertisement or require employers to create an advertisement in order to hire.

What Information Must Be Included in the Covered Advertisement?

The Law requires that employers state the minimum and maximum salary that they, in good faith, honestly believe at the time of the posting they are willing to pay successful applicant(s) for the advertised job, promotion, or transfer opportunity. "Salary" includes "the base wage or rate of pay, regardless of the frequency of payment," but does not include "other forms of compensation or benefits offered" in connection with the advertised job, promotion, or transfer opportunity, such as: health, life, or other employer-provided insurance; paid or unpaid time off work; the availability of or contributions toward retirement or savings funds; severance pay; overtime pay; or other forms of compensation, such as commissions, bonuses, stock, etc. Employers are allowed to include information about "other forms of compensation or benefits offered" even though this information is not required.

Note that the salary range may not be open-ended (e.g., "maximum of $60,000 per year" or "up to $40.00 per hour" or "$55,000 per year and up" or "minimum of $35.00"). In essence, if the employer is honestly considering a range of possible compensation for a particular position, that information must be included in the advertisement. However, the minimum and maximum range may be identical if the employer has no leeway in what they can offer (e.g., "$45,000 per year" or "$25.00 per hour").

How Will the Transparency Law Be Enforced?

The NYC Commission on Human Rights (the "Commission") will accept and investigate complaints filed by members of the public, and it provides a phone number and an email address where individuals may submit complaints. The Law Enforcement Bureau may also initiate its own investigation based on "testing, tips, and other sources of information."

Because the Transparency Law makes failing to include a good-faith salary range an unlawful discriminatory practice under the NYCHRL, it follows that, as with other discrimination claims under the NYCHRL, aggrieved individuals will be able to file a complaint with the Commission or directly in court. Notably, per the text of the Law, it appears that current employees are the only individuals who have a private right of action against their employer (i.e., it does not appear that applicants have a private right of action under the Law).

Employers who are found to have violated the Law may have to pay monetary damages and may be subject to civil penalties of up to $250,000 per violation. Employers may also be required to provide affirmative relief, including but not limited to amending advertisements and postings, creating or updating policies, conducting trainings, and/or providing notices of rights to employees or applicants.

What Else Should Employers Keep in Mind When Creating and Posting Job Advertisements?

The guidance interpreting the Transparency Law is still developing. Given that several other jurisdictions have adopted a similar salary transparency law, it is possible that NYC may consider their position on certain issues when applying its own law. For example, Colorado passed a salary transparency law in 2021, which generally requires employers to include a salary range for positions that are performed within the state, whether in person or remotely, but excludes out-of-state jobs.² The Colorado Department of Labor has taken the position that employers who post remote jobs cannot avoid complying with the salary transparency law by stating that applicants cannot be based in Colorado, because such a statement conveys a preference among applicants as opposed to a description of the location of the position.³ While not expressly stated, wording in the Commission's guidance (i.e., that a good faith salary range must be included for advertisements where the position "can or will be performed, in whole or in part, in New York City, whether from an office, in the field, or remotely from the employee's home") certainly suggests that NYC may take the same position as Colorado if confronted with the same issue.

Employers should consult with counsel to ensure that they are meeting the requirements of the Law and to discuss any situations where the Law's application may be unclear.

Footnotes

1. The NYC Commission on Human Rights released guidance regarding the Transparency Law, which may be accessed here: https://www1.nyc.gov/assets/cchr/downloads/pdf/publications/Salary-Transparency-Factsheet.pdf.

2. A summary of Colorado's salary transparency law may be accessed here: https://cdle.colorado.gov/sites/cdle/files/INFO%20%239_%20Equal%20Pay%20Transparency%20Rules%20%28Revised%20July%202021%29.pdf.

3. The Compliance Assistance Letter prepared by Colorado's Department of Labor may be accessed here: https://cdle.colorado.gov/sites/cdle/files/Compliance%20Assistance%20Letter%20to%20Employers%2C%20Remote%20Jobs%20Covered%20by%20EPEWA.pdf.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.