New York State has enacted the Salary Transparency Law (S.9427/A.10477), now in effect since September 17, 2023. This legislation requires employers with four or more employees to disclose the compensation or range of compensation in all advertisements for job, promotion, or transfer opportunities.
Employers need to be aware of the new salary transparency requirements to avoid fines and other legal consequences. The BPSR Small Business Practice Group understands that there might be small businesses, especially those without regulatory compliance support, who might not be fully aware of these new requirements.
This edition of the BPSR Blog aims to provide a detailed examination of the key provisions of this law, its scope of application, and the necessary steps for compliance.
What Needs to Be Disclosed?
New York State Pay Transparency Law mandates private employers with four or more employees to disclose a salary or pay range in all advertised job, promotion, or transfer opportunities. This applies to positions performed wholly or partly in New York State, and even to remote roles that report to a New York-based supervisor or office. The law covers advertisements across various platforms, such as newspapers, social media, or job-listing websites. The pay range should be a good faith estimate of the employer’s offering, with a defined minimum and maximum, and if it’s a fixed rate, that rate should be specified.
Drafting the Pay Range
The New York State Pay Transparency Law outlines that a pay range, reflecting the minimum and maximum annual salary or hourly rate, must be included in job advertisements. If a fixed rate like $30 an hour is to be offered, it must be listed. Pay ranges can’t be open-ended (e.g., “$20+ an hour”) and should only reflect monetary compensation, not other benefits like insurance or paid leave, though these can be disclosed separately. For commission-based pay, it must be clearly stated in the advertisement. Employers are required to make a good faith effort in determining and presenting the pay range.
What Are the Consequences of Noncompliance?
If an employer fails to comply with the New York State Pay Transparency Law for reasons other than failing to pay due wages, benefits, or wage supplements, they may be subjected to civil penalties. The penalty amounts are structured as follows:
- First violation: Up to $1,000
- Second violation: Up to $2,000
- Third or subsequent violation: Up to $3,000
The exact penalty amount is determined by the commissioner, considering various factors including the size of the employer’s business, the employer’s good faith belief that they were complying with the law, the severity of the violation, any history of previous violations, and in cases involving wages, benefits, or supplements violations, the failure to adhere to recordkeeping or other non-wage requirements.
What Is Retaliation?
The New York State Pay Transparency Law prohibits retaliation against any applicant or employee who engaged in protected activities. Retaliation in this context could include, but is not limited to, refusal to interview, hire, promote, employ an individual because that individual exercised their rights under the law.
What is a Good Faith Pay Range?
In the context of the New York State Pay Transparency Law, a “good faith” pay range refers to a compensation range that an employer genuinely believes they are willing to pay at the time they post an advertisement. When determining this range, employers are advised to consider various factors including the current job market, existing employee pay levels, the allocated hiring budget, and the level of experience or education they are willing to accept from a candidate. There is flexibility for employers to adjust the advertised pay range as they gather more information during the hiring process.
Job Description Requirements
The New York State Pay Transparency Law mandates that all postings for a job, promotion, or transfer opportunity must feature a job description when available. However, there is an exception to this rule in scenarios where the job title itself succinctly conveys the nature of the job duties. For instance, if a job title like “dishwasher” clearly outlines the role’s duties, the employer is exempted from creating a detailed job description.
Other Potential Pitfalls
Emails sent to multiple applicants count as covered advertising. The same goes for third-party postings if you’ve given consent to that third-party to post on your behalf. Additionally, lack of “space” in an advertisement is not considered and is an excuse for noncompliance. Employers should also stay diligent with the rest of their employment practices given that pay transparency can open the door to other employment-related claims.
What Should Employers Do?
Employers should review their current advertisements, and if necessary, update their job advertisement practices ensuring compliance with the new requirements. It would be prudent for employers to consult with legal professionals to understand the full extent of the law and its implications on current operational practices.
In light of these new legal requirements, the BPSR Small Business Practice Group offers dedicated support to help businesses navigate the complexities of the Salary Transparency Law. The team is well-equipped to provide the necessary guidance and expertise to ensure that your business remains compliant with this and other employment laws. Please contact us to discuss further.