Seeing Through the Pay Transparency Law

NYC Local Law 32, known as the "Pay Transparency Law" (Law), will require employers hiring in New York City to disclose the minimum and maximum annual base salary or hourly wage for a job, promotion or transfer opportunity in any advertisement for the position beginning on Nov. 1, 2022.

The Law amends the New York City Human Rights Law (NYCHRL) by making it an unlawful discriminatory practice to advertise a job, promotion or transfer opportunity without including in the advertisement the range of base salary (or wage) the employer believes, in good faith at the time of the posting, it would pay for the advertised position.

New York City joins a growing number of cities and states that have enacted similar salary transparency laws in the last few years, including Colorado, Connecticut, Maryland, Nevada, Rhode Island, Washington and California. (See previous Holland & Knight alert, "California Expands Pay Data Reporting and Mandates Pay Scale Disclosures," Oct. 18, 2022.) Similar legislation is pending in New York state.

Which Employers Are Covered?

The Law covers all employers with four or more employees or one or more domestic workers, provided at least one of those employees works in New York City. The four employees do not need to work in the same location or all work in New York City. Owners and individual employers count toward the four employees, as do independent contractors, part-time employees, paid interns and domestic workers.

Which Job Postings Are Covered?

The Law applies to any advertisement for a job, promotion or transfer opportunity that can or will be performed in New York City. The Commission on Human Rights defines "advertisement" broadly to include any written description of an available job, promotion or transfer opportunity that is publicized to a pool of potential applicants, regardless of the medium in which the advertisement is disseminated. Examples of covered listings include postings on internal bulletin boards, internet advertisements, printed flyers distributed at job fairs and newspaper advertisements.

The Law covers job postings that seek full- or part-time employees, interns, domestic workers and independent contractors. Job postings for temporary employment or positions that cannot, and will not, be performed in New York City are excluded from the law's requirements.

Does the Law Apply to a Posting for a Remote or Hybrid position?

The Law applies to a posting for a fully remote or hybrid position, if the position can or will be performed in New York City, in whole or in part, whether from an office, in the field or remotely from the employee's home.

Is an Employer Required to Post a Job, Transfer Opportunity or Promotion Before Hiring an Employee to Fill the Position?

The Law does not require an employer to post an advertisement before hiring externally or selecting an existing employee to fill a position.

How Does an Employer Determine the Pay Range to Include in the Posting?

An employer must disclose the minimum and maximum annual base salary or hourly rate that the employer believes "in good faith," at the time of the posting, it is willing to pay for the advertised job. What constitutes a "good faith" pay range has not been defined. But the NYC Commission on Human Rights has provided the following guidelines:

• The range cannot be open-ended. For example, "$15 per hour and up" or "maximum $50,000 per year" is not consistent with the law's requirements.
• If an employer has no flexibility in the salary being offered for a position, the minimum and maximum salary may be identical – for example, "$20 per hour."
• If an advertisement covers multiple jobs, promotions or transfer opportunities, it can include salary ranges that are specific to each opportunity.
• The employer is not required, but is permitted to, include information in the advertisement about benefits and other types of compensation offered in connection with the advertised job opportunity, such as health insurance, paid or unpaid time off work, severance pay, overtime pay, commissions, or bonuses.

What Are the Potential Consequences of Noncompliance with the Law?

The NYC Commission on Human Rights enforces the Law. Employers who violate the Law are subject to paying monetary damages (if any) to adversely affected individuals and being directed to amend advertisements and postings, create or update policies, conduct training, provide notices of rights to employees or applicants, and engage in other forms of affirmative relief.

An employer will receive a warning for a first complaint of noncompliance, provided the employer shows it cured its noncompliance within 30 days of receiving the warning. An employer may have to pay civil penalties up to $250,000 for an uncured first violation and any subsequent violations.

Conclusion and Takeaways

In anticipation of the Nov. 1, 2022, deadline, employers should review their current job advertisement policies and templates and take immediate steps to ensure that these postings are consistent with the requirements of the Law.

For more information on this topic, please contact the authors or your Holland & Knight attorney.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.