New York Becomes the Latest State to Require Salary Transparency in Job Postings

New York Becomes the Latest State to Require Salary Transparency in Job Postings

On December 21, 2022, Governor Kathy Hochul signed the New York State Compensation Transparency Act into law, making New York the fourth state to enact salary transparency requirements for job postings. This statewide law follows the wage transparency trend already seen locally in New York and other states across the country. The new law will enter into force on September 17, 2023.

Like its New York City counterpart, the new state law applies to employers located in New York State with four or more employees. However, it is currently unknown whether this means that all four employees must be employed within New York State or whether an employer is covered if it employs four employees regardless of location. The law requires such employers to disclose the compensation range in advertisements for all positions that may be performed, at least in part, in New York State. The law expressly covers any work that can to be performed in the state, so it likely applies to postings for all remote work that can be done from New York.

The law further requires employers to include a compensation range in all advertisements for new jobs, promotions and transfer opportunities. Compensation range is defined as “the minimum and maximum annual wage or hourly compensation range for the…opportunity that the employer in good faith believes to be accurate at the time of posting an advertisement for such opportunity.” Contrary to New York City law, advertisements for commission-only jobs must include a general statement that the position is in fact commission-based.

Unlike New York City law, state law requires that if a job description exists for the position, it must be included in the posting. The law does not define a “job description” and does not appear to require an employer to create such a description for a position in order to advertise for it. The law includes a recordkeeping provision that requires employers to keep records of the history of compensation ranges for each position, as well as job descriptions for each position to the extent they exist.

New York State law includes an anti-retaliation provision that prohibits an employer from refusing to interview, hire, promote, or hire an applicant or current employee for exercising any right under the law.

New York state law does not expressly create a private right of action for tort. However, it provides that violations are subject to investigation and prosecution by the state labor commissioner, with civil penalties not to exceed $1,000 for the first violation, $2,000 for the second violation, and $3,000 for the third and subsequent violations.

The NY Department of Labor is authorized to promulgate regulations to clarify this law, so we expect the commissioner to issue guidance on the law in the coming year.

As pay transparency laws have proliferated across the country, it has become a topic employers can’t avoid. New York employers should begin preparations for the September 2023 effective date by ensuring that their human resources and compensation departments, as well as third-party employment agencies, are informed of the new requirements. Employers should also take steps to determine and document compensation ranges using existing data or projecting figures on a good faith basis. Additionally, employers should anticipate salary review requests from current employees and consider how to respond to them through existing or new internal practices.

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