New York City’s Pay Transparency Law, effective November 1, 2022, aims to tackle gender and racial pay gaps by requiring employers hiring for jobs in New York City to publish a salary range for a job, promotion or transfer opportunity in any advertisement for the position. We explore this new law, the state of salary disclosure nationwide, and what it means for employers.

The What and Why of Salary Disclosure in NYC 
Beginning on November 1, 2022, all employers are required to disclose the minimum and maximum annual base salary or hourly wage that the employer believes, in good faith at the time of the posting, it would pay for the advertised position. This applies to all postings for jobs that can or will be performed in New York City. The law covers all employers with four or more employees (including full or part-time employees, interns, domestic workers and independent contractors), provided at least one of the employees works, in whole or in part, in New York City. The law also applies to employment agencies, but temporary help firms are exempt from the salary disclosure requirements.

The Pay Transparency Law applies to remote or hybrid positions, as long as the position can or will be performed in New York City, in whole or in part.

The salary range cannot be open-ended and does not need to include other forms of compensation and the cost of other benefits. The law will be enforced by the New York City Commission on Human Rights, and employers may be subject to civil lawsuits, as well as penalties and fines for violations. The intent of the law is to reduce pay discrepancies between genders and racial groups by requiring transparency.

Salary Disclosure is Trending Across the Nation 
NYC is not alone in salary disclosure efforts. California, Nevada, and Maryland are among a long list of states and cities that have enacted similar initiatives. This is a good indication that the trend will continue, with more states and localities likely to enact similar regulations in the future.

In addition to state and local laws, the federal government has gotten involved in salary disclosure efforts. While mostly leaving it to states and localities, the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) has enacted rules to protect employees of federal contractors and subcontractors from being terminated for discussing, disclosing, or asking about their salary equity.   

What Does This Mean for Employers? 
Employers hiring in NYC should review existing covered job postings, as well as job advertisement policies and templates, and revise for compliance with the salary disclosure requirements.

As the salary disclosure trend continues and these initiatives mature, we'll be watching the topic closely.

***This blog is for general informational purposes only and is not intended to offer legal advice. Consult with an attorney for further information or specific advice.