New York City’s highly anticipated pay transparency law took effect on November 1, 2022. The new law is intended to help reduce gender and racial pay discrimination. At a high level, it requires employers to share minimum and maximum salary or hourly wage for new positions, promotions, and transfers.

So, how’s it going now that we’re a month in? The results so far have been mixed at best; let’s take a look.

What does the law require?

When advertising a job, promotion, or transfer opportunity, employers are required to in good faith state the minimum and maximum salary they’re willing to pay for it. 

Employers must include both a minimum and a maximum salary or wage range, not an open-ended listing as in “$30 per hour and up” or “maximum $65,000 per year.” If there is no flexibility, the minimum and maximum amounts can be identical. 

If a company is covering multiple jobs/promotions/transfer opportunities in a single ad, each listing must include salary ranges specific to each offering.

Who’s complying, and who’s not

Some employers began sharing pay ranges in New York City before the law went into effect, including JPMorgan Chase and Whole Foods, while others, such as Pfizer, haven’t started yet.

As of November 12, 2022, 60% of job listings in New York City include salary information. Here’s a look at what types of employers are leading the way and which are lagging behind:

Leaders in NYC pay transparency

  • Government and public administration (69%)
  • Nonprofit and non-governmental organizations (68%)
  • Human resources and staffing (67%)
  • Transportation and logistics (63%)
  • Media and communication (61%)
  • Restaurants and food service (61%).

Laggards in NYC pay transparency

  • Aerospace and defense (43%)
  • Manufacturing (41%)
  • Information technology (37%)
  • Financial services (37%)
  • Pharmaceutical and biotechnology (29%)

The role of pay transparency

The goal of pay transparency is to prevent marginalized pay discrimination and correct already existing gaps. The intended result is that everyone, regardless of gender, race/ethnicity, or age, is paid equitably. And, documenting employees’ wages goes a long way toward identifying and reducing gender and racial pay gaps.

What’s at stake

With regard to the NYC law, violations can be reported to the New York City Commission on Human Rights and employers can be subject to penalties of up to $250,000 per violation

Plus, it’s not enough to post just any salary range; it must be a “good-faith” estimate. Some employers have pushed the boundaries on this. 

Examples include a New York Post ad with a range of $50,000 to $145,000, a Dow Jones posting with a range of $40,000 to $160,000 a year, and perhaps the most ridiculous example, blamed on a “technical error” a Citibank listing with a salary range of $0 to $2 million.

Clearly, it will take time for organizations to adapt to these changes. For one thing, the legislation went into effect practically overnight; even with a nearly six-month delay, many employers weren’t prepared to be in compliance.

What employers can do

New laws similar to New York City’s have gone into effect already in Colorado and will be coming soon to California, Connecticut, Nevada, Rhode Island, and Washington

With this in mind, savvy organizations need to take action with regard to their compensation philosophy, internal pay bands, and approach to sharing salary information publicly. This is important because another area of risk to employers is the threat of legal action from employees who discover they’re not being paid in the established salary range.

Trusaic’s pay equity auditing software, PayParity, can help review your compensation details and identify any unexplained pay disparities at the intersection of gender and race/ethnicity. PayParity includes the Salary Range Finder, which helps organizations extend equitable and competitive salary offers, so they can confidently share salary ranges for job listings before posting them publicly.

To learn more about how Trusaic can help you stay compliant with the new pay transparency laws, schedule a meeting with one of our experts.

For more information on emerging pay equity-related laws, download the Pay Equity Definitive Guide below.

Download: Pay Equity Definitive Guide

Pay equity laws are coming into play all over the world. Download the Pay Equity Definitive Guide to understand what’s required of your business.