New York State to Require Employers to List Compensation Range

Thursday, December 29, 2022

Following New York City’s adoption of a salary transparency ordinance on November 1, 2022, New York State has enacted a similar requirement for employers to list a range of compensation in advertisements for employment, promotion or transfer opportunities. The new state law may have a broad reach because it applies to all remote positions that can or will be performed, even partially, in New York State. In doing so, New York joins other states, including California, Colorado and Washington, in establishing new wage transparency requirements for employers. The new law enters into force on September 17, 2023, 270 days after its adoption.

The law applies to employers with at least four employees, as well as employment agencies or recruiters. However, temporary help firms are excluded from coverage. Covered employers are required to disclose in any job posting, promotion, or transfer opportunity the minimum and maximum annual salary or hourly compensation range that the employer believes in good faith to be accurate at the time of posting. For positions that are commission-only, the employer must include a general statement that compensation will be based on commission to satisfy disclosure requirements. These requirements are similar to the New York City ordinance passed earlier this year.

The New York State Wage Transparency Act imposes some additional requirements not found in the New York City Ordinance. Most importantly, covered employers are also required to disclose the applicable job description, if any, in any advertisement for a job, promotion, or transfer opportunity and to maintain and retain records necessary to demonstrate compliance with the statute. This data may include the history of compensation ranges for each job, promotion or transfer opportunity, as well as job descriptions for the positions. Failure to comply with the requirements under this Act may result in civil penalties ranging from $1,000 for an employer’s first violation to $3,000 for a third or subsequent violation. Additionally, state law does not preempt or supersede New York City’s ordinance, so employers may also be subject to much larger penalties imposed by city law.

As noted above, the statute applies to any work that can or will be performed, at least in part, in New York State, meaning that all listings for remote positions that can be performed from any location must be pursuant to this statute, since the employee could reside in New York and work remotely from there.

With similar pay transparency laws spreading across the country, all employers — especially those in New York and other states affected or offering remote positions — should take some steps to address pay equity issues before such issues are brought to light by the new laws:

Determine and document salary ranges for all positions

Review employee compensation and address any pay disparities before revealing a salary range

Create, enforce and publicize compensation policies to ensure employees are aware of legitimate reasons for any pay differential

Collect and maintain salary records, including compensation range history and job descriptions for each job, promotion or transfer opportunity

Revise existing templates of job postings or create new templates in accordance with the requirements of the law

Consider carefully whether the positions must be fully remote unless it is desired to detect an offset range

The New York State Labor Commissioner is authorized to issue further regulations that may clarify the obligations and nuances of this new law. In the meantime, covered employers are advised to review the new wage transparency laws in New York and statewide to ensure compliance.

© Polsinelli PC, Polsinelli LLP in California National Law Review, Volume XII, Number 363