On January 15, 2022, New York City passed the Salary Range Transparency Act, requiring employers with four or more employees to disclose salary ranges in advertisements for jobs, promotions and transfer opportunities. Passed with the intention of achieving greater pay equity, the law makes it an "unlawful discriminatory practice" under the New York City Human Rights Law (NYCHRL) for employers to advertise a job without identifying the minimum and maximum potential salary range for the position.
The law, which was slated to take effect on May 15, 2022, was met with resistance from opponents who argued businesses were disadvantaged by the law's original timeline for implementation and by certain aspects of the law seen as particularly problematic. On April 28, 2022, the New York City Council passed an amended version of the act, Int. 134-A, delaying the effective date of implementation until November 1, 2022, among other changes discussed below.
New York City Mayor Eric Adams signed the amendments into law on May 12, 2022, and the New York City Commission on Human Rights (NYCCHR) simultaneously issued updated guidance on the law.
First and foremost, the law gives employers six more months to prepare for compliance. In addition to this delay in implementation, the amendments:
- Add clarifying language requiring that the "minimum and maximum annual salary or hourly wage for a position" be posted, codifying the NYCCHR's original guidance suggesting the requirement will extend to hourly workers. (Emphasis added.)
- Provide that positions "that cannot or will not be performed, at least in part, in the City of New York" will be exempt from the salary posting requirement, a topic previously unaddressed in the original version of the law.
- Clarify that the salary disclosure requirement for job postings extends beyond employers and not only to employment agencies, but also to "employees or agents thereof." However, advertisements for temporary employment positions at "temporary help firms" are still exempted from the law.
Interpretation of "Cannot or Will Not"
The interplay between the law's amendment providing that positions that "cannot or will not be performed, at least in part, in the City of New York" together with the NYCCHR's related guidance is not yet clear. As noted above, the NYCCHR issued updated guidance to coincide with the law's amendments. NYCCHR's updated guidance maintains the position that the law covers postings for "positions that 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." The guidance, which was not revised from its use of permissive language (can or will), appears broader than the amendments, which plainly limit applicability (cannot or will not). It is unclear how or whether this guidance might be shaped by the amendments' additional language that the law does not apply to postings for positions that "cannot or will not" be performed in New York City.
Compare this scenario with the similar Colorado Equal Pay for Equal Work Act, which required employers to include the range for the salary or hourly compensation in each job posting. Many argued the law had the "unintended consequence" of encouraging employers to evade their obligations with respect to wage transparency by posting that a remote job is open for anyone except individuals who live in Colorado. In response to this conundrum, Colorado's Department of Labor and Employment issued guidance making clear that the law applied to covered Colorado employers posting positions for "remote work performable anywhere." (Emphasis added.)
NYCCHR's guidance is not so explicit. In sum, it remains to be seen whether NYCCHR will broadly interpret the law and guidance to cover positions capable of being performed in New York City, or if a narrower reading, leaving the determination of where the job is performable to the employer posting the position, will control.
Changes to Enforcement
The law specifies two types of enforcement mechanisms. First, the law's private right of action, narrowed significantly by the amendments, provides employees the right to sue their "current employers" for violations of the law. This clarification is significant, as the original law left open the possibility of a private right of action by job applicants-a feature that would have drastically expanded the scope of potential liability for employers.
Second, the NYCCHR will accept, investigate and initiate complaints alleging violations of the salary transparency protection. In this respect, the amendments provide some relief to employers when it comes to penalties for first-time violations. Under the amended law, the penalty for the first violation of the law is $0 as long as employers submit proof that the violation is cured within 30 days of receiving the complaint. If the Commission accepts the proof of cure (which is only available for first-time violations), then it is deemed "an admission of liability for all purposes." The updated guidance provides that information regarding the process for submitting proof of a fixed violation and appealing a civil penalty for a violation of the new salary transparency protection will be available on the NYCCHR's website. The law is enforced through the NYCCHR's existing complaint enforcement scheme, and as such, we expect that this process will closely track the relevant aspects of that scheme. The updated guidance makes clear that uncured violations, as well as subsequent violations, could result in civil penalties of up to $250,000.
What This Means for Employers
Employers should make the most of this extended enforcement timeline for the New York City law by ensuring that their internal pay practices are conducive to a salary band approach for job postings come November 1, 2022. Because the law requires employers to state salary ranges that they in "good faith" believe at the time of posting they would pay for the position, employers should examine their existing wage data to determine salary ranges for each position.
As explained in our previous article, employers should also take steps to update job descriptions, step up performance management and obtain thorough documentation of business justifications for pay decisions in order to put themselves in the best possible position to defend against pay equity claims.
For More Information
If you have any questions about this Alert, please contact Eve I. Klein, Jenna M. Decker, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.