January 18, 2022

Pay Equity Update: New York City’s New Salary Range Disclosure Law

Several states and localities have passed laws that seek to address pay inequity, based on gender, race and other protected categories. While the intent behind these laws is similar, the laws impose different obligations. Some laws prohibit employers from inquiring about an applicant’s salary history (e.g., New York, New Jersey) or relying on that information even if voluntarily disclosed (e.g., Illinois).  Some laws go further by requiring employers to disclose the salary range for a position in any job posting (e.g., Colorado), or providing that range to the applicant at a specific point in the hiring process or upon request (e.g., Connecticut). Most laws also apply to promotions, and thus impact an employer’s internal hiring practices (e.g., Washington).  

New York City is the latest locality to impose a salary range disclosure requirement on employers. On January 15, 2022, the New York City Human Rights Law (NYCHRL) was amended to prohibit employers with four or more workers (including independent contractors) from advertising a job, promotion or transfer opportunity without stating the minimum and maximum salary for the position.  The range may extend from the lowest to the highest salary the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion or transfer opportunity. The term “salary” is not defined, but given the remedial nature of the law, covered employers should be prepared to disclose the salary/wage range for all positions, regardless of whether the position is classified as salaried, exempt or hourly, non-exempt. Temporary staffing agencies are excluded given they are subject to a similar requirement under the New York State Wage Theft Prevention Act. New York’s salary range law is effective 120 days after enactment (i.e., May 15, 2022). 

Consequently, most New York City employers have a few months to make the necessary changes to their hiring practices. The New York City Commission on Human Rights (NYCCHR) is authorized to enforce the NYCHRL, and under existing mechanisms, may impose civil penalties of up to $125,000 for unlawful discriminatory practices. A private cause of action is also available to redress violations of the NYCHRL. Currently, it remains unclear whether New York City’s salary range disclosure requirement applies to all job postings disseminated from a covered New York City employer, or if it is limited to positions that require the job to be performed (remotely or onsite) in New York City. We anticipate that the NYCCHR will issue clarifying regulations and/or guidance addressing the scope of the law’s disclosure obligations in the near future.

Nevertheless, every employer should carefully consider whether its recruiting and hiring practices may be subject to one or more salary history and/or disclosure laws. Indeed, the changing labor market has forced employers to modify their hiring practices, in some cases advertising jobs that can be performed fully remote. Those job listings are often posted on social media or recruiting sites, which may pull applicants from a variety of states and localities, including in Illinois, California, Washington, Colorado, Connecticut, New Jersey, New York and New York City, and other places that have salary history bans or impose disclosure obligations. Employers are encouraged to consult with legal counsel to help navigate these laws to ensure compliance.        

 

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