- with readers working within the Telecomms industries
Key Takeaways
- New York City lawmakers adopted new laws requiring large employers to submit to the city annual pay reports broken down by certain demographics.
- Employers that do not comply with the new law will be subject to fines and/or inclusion on a city website that identifies those that are not in compliance.
- Although the pay-reporting requirements take effect immediately, employers are not required to submit information until the city creates a process for doing so.
Certain New York City employers will soon be required to hand over employee compensation data to the city. The aim is to pressure employers to address pay disparities in the private workforce based on demographics such as gender and race.
Reporting Requirements
Under the newly enacted pay equity laws, employers with 200 or more employees in the city will need to file annual reports detailing employee race or ethnicity and gender information across certain job categories and different pay ranges. The city agency that will oversee this new initiative may request additional data as well, such as information about employee gender identity or other demographics. Employers will not need to provide an employee's personal information as part of the reports, but they will have the option to submit written remarks to provide explanations or context for the data in their submission. Additionally, employers may furnish data anonymously, but they will also be required to submit a signed statement confirming that they provided accurate pay data.
The new reporting requirement may be familiar to some employers. The Equal Employment Opportunity Commission (EEOC) previously called for employers to submit this kind of data in their 2017 and 2018 annual EEO-1 reports. Similar to NYC lawmakers' stated goal with this new law, the EEOC said gathering this data would help improve its enforcement efforts to combat pay discrimination, identify trends, and help employers assess their pay policies and practices. [The Trump administration, however, later scrapped the EEOC requirement in the President's first term.]
Reporting Timeline
Mayor Eric Adams vetoed the act last month, but on December 4, the New York City Council voted to override his veto. New York City employers will not have to start gathering the pay data immediately, though. Now that the law has been enacted, the mayor has up to one year to select a city agency to lead the pay equity initiative. That agency will then have up to one year to create the system to collect employers' pay data. Once that process is finalized, employers will then have one year to provide the required information, which must be submitted annually thereafter. The city agency designated to review the data will have up to six months to conduct a pay equity study to evaluate whether there are disparities in compensation among employees based on gender and race or ethnicity and, if there are, to identify industries where disparities may be prevalent and any trends in occupational segregation based on gender and race or ethnicity. The agency must then prepare a report to the mayor and the City Council that includes recommendations regarding employer action plans for addressing any disparities identified through the study.
Penalties for Noncompliance
Employers that do not provide the city with the required information will be subject to penalties. For the first offense, employers will have to pay $1,000 unless they provide the report within 30 days of the city's formal request. Subsequent violations will result in fines of $5,000 each. In addition, when submitting the pay reports, employers are required to file a statement signed by an authorized agent confirming the submission of the data and its accuracy. If employers fail to abide by this rule and do not provide the verification within 30 days after the city's formal request, they will be listed on a city website alongside other non-compliant employers.
Next Steps for Employers
Before the mayor designates a city agency to oversee the reporting process, employers should consult with counsel to review and audit internal pay practices and ensure they adhere to the federal and state equal pay laws. Early and proactive action will allow employers to identify and address any potential pay concerns before the data must be reported.
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