On November 1, 2022, New York City began requiring most employers to provide “good faith” salary ranges on job ads, promotions, and transfer opportunities. In more detailed terms, employers are now required to disclose the minimum and maximum annual base salary or hourly wage that the employer believes, in good faith at the time of posting, it would pay for the advertised position.
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.
Here are 3 things you need to know about these new laws:
1. They are going to quickly become the norm
Salary Transparency is trending. A slew of other states that are following suit or have already enacted pay transparency laws include Colorado, Connecticut, Maryland, Rhode Island, Washington, and Nevada, as well as others like California that will see these laws take effect next year.
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.
2. Candidates will expect it
The war for talent really never ends, even during periods of recession. Organizations still need competitive differentiators, like compensation (hello, inflation) to win over talent.
Discussing salary, growth opportunities, and even bonuses, is a brilliant way to win trust early in the recruitment process. Salary has been such a hush hush topic for so long that candidates will now demand its transparency as a necessity to move forward.
3. It will help you retain talent
As transparency about compensation rises externally, it will naturally need to arise internally. This gives employers the opportunity to use quarterly, bi-annually, or annual reviews as an opportunity to discuss pay increases and bonuses for their teams. We minimize the effect that knowledge has on our people. Just like potential candidates want to understand the details, current employees want to understand their progress and growth opportunities related to salary, promotions, etc.
Want to understand more about the impact of these new laws? Stay tuned for next week’s blog as we dive into how this tackles gender and racial pay gaps in the US.
**As the salary transparency 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.