Combating the Pay Gap: Changes to Pay Transparency in New York

June 15, 2022

In 2022, New York City and New York State have seen significant developments in employment law, including pay transparency.

The New York City Council issued a report that analyzed pay differences in the New York City municipal workforce.  That report established that in 2018, male workers earned a median salary of $21,600 more than women. The report further disclosed that women of color also had received substantially less compensation than their male counterparts. Litigants across the country are fighting to advance pay equity. For example, after approximately five years of litigation, Google has agreed to pay $118 million to settle a California state court class action brought on behalf of over 15,000 female former employees who accused the company of underpaying women. To further combat pay inequity, Google has agreed to have independent experts analyze its hiring and pay equity practices.

The recent New York legislation is long overdue and is part of a nationwide effort to increase transparency in salaries to address racial and gender pay gaps.

New York City Pay Transparency

An amendment to the New York City Human Rights Law Section 8-107(32) will require employers to provide salary information with job advertisements. Under the amendment, employers must include the minimum and maximum salary for any advertised job, promotion, or transfer opportunity. This requirement will apply to any position, whether salaried or paid on an hourly basis. The amendment was to have taken effect on May 15, 2022. However, the City Council amended the legislation in response to concerns from the business community that the law was unclear, burdensome, and could open the floodgates to litigation. Given the amendment, the law will not go into effect until November 1, 2022.

The legislation applies to employers with at least four employees as well as employment agencies, but not to temporary staffing agencies advertising for temporary job opportunities. Independent contractors are included in the calculus of the four-employee threshold.  The law does not apply to positions that cannot or will not be performed in New York City.  Additionally, the new amendments clarify that only current employees may pursue a private right of action against their employers for an alleged violation of the law, which eliminates the risk of applicants pursuing private claims against prospective employers. In adjusting the new legislation, the City Council allotted businesses thirty days to remedy a first-time violation before it will impose a fine. Subsequent offenses are subject to civil penalties of up to $125,000, or up to $250,000 if the act was willful, wanton, or malicious.

New York State Pay Transparency

 Earlier this month, a similar bill that will require employers to disclose the salary in job postings passed both the New York State Assembly and Senate and headed to Governor Kathy Hochul’s desk. Much like its New York City counterpart, the New York State bill pertains to postings for new job positions, promotions, or transfer opportunities that will be wholly or partly performed in the State of New York for employers with at least four employees. The law also addresses positions paid on commission, stating employers can comply with “a general statement that compensation shall be based on commission.” However, unlike the City law, the State law does not require a salary range to be posted. Instead, one figure suffices.  

The New York State Department of Labor will oversee the enforcement of the New York State legislation. Employers who violate the law will be subject to financial penalties under New York Labor Law. An employer deemed noncompliant with the law will be subject to civil penalties – up to $1,000 for the first violation, $2,000 for the second violation, and $3,000 for a third or subsequent violation. If Gov. Hochul signs the bill, it will take effect 270 days after signature.

In light of the passage of (and subsequent amendment to) the New York City pay transparency legislation, and in anticipation of the State legislation, covered employers should prepare to comply. Based on the wording, these bills may cover even fully remote positions where an applicant could work from home in New York City or New York State, expanding potential employer liability. Obermayer’s Labor and Employment attorneys remain prepared to answer any questions regarding this significant change in New York City and New York State employment law and help you achieve compliance.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.