Pay Transparency Law

The New York City Council closed out 2021 with a step to bolster pay equity, approving a bill that would require employers to post salary ranges in job listings. 

Earlier this month the was bill was effectively signed into law when New York City Mayor, Eric Adams neither signed nor vetoed the bill. The passage of the law signals a growing movement to promote wage transparency across the country. Below we outline what employers need to know about the law and why similar laws are cropping up across the nation.

What does the pay transparency law require?

New York City employers with more than four employees must include the minimum and maximum salary range offered in the job listing. This includes promotional and transfer opportunities.

Expressly, the law amends the city’s administrative code to “make it an unlawful discriminatory practice to not include in job listings the minimum and maximum salary offered for any position located within New York City. The range for the listed maximum and minimum salary would extend from the lowest salary to the highest salary that the employer in good faith believes it would pay for the advertised job, promotion, or transfer.”

The law does not apply to job postings for temporary employment at temporary staffing firms, which already provide this information as required by the New York State Wage Theft Prevention Act.

Penalties for non-compliance

The law will take effect May 15 and employers will need to share salary ranges for available job positions. Organizations that fail to adequately disclose salary range information could be subject to penalties as high as $125,000 in addition to other civil penalties

The growing trend of pay transparency

New York City is the latest in a string of local jurisdictions and states to combat wage discrimination through pay transparency. California, Colorado, Connecticut, and Nevada are among a few states to recently pass laws requiring organizations to provide upfront salary range disclosures.  Increased pay transparency has proven to be an effective way of reducing gender and racial-ethnic pay gaps. The practice of documenting pay ranges in job listings can reveal wage disparities within an organization, providing employers incentive to address equal pay issues proactively. In addition, promoting salary information upfront helps prospective employees assess how realistic a position is before applying, saving time for themselves and HR recruiting departments.

As a local and federal focus on pay equity continues to pick up speed, employers should prepare accordingly.

Best practices encourage organizations to deepen their pay transparency efforts by evaluating their current workforce makeup and performing a proactive pay equity audit to ensure fairness in compensation.

Partnering with a professional diversity, equity, and inclusion (DEI)expert safeguards the accuracy of your audit as well as provides insight into how best to correct any identified pay disparities or employee equity barriers. Our PayParity solution offers consulting, auditing, and monitoring tools needed to achieve pay equity within your workplace. PayParity helps your organization promote transparency through a holistic analysis of employee compensation at the intersections of gender, race/ethnicity, and age. If you need assistance preparing for the upcoming requirements of the New York City pay transparency law, contact us to learn about how PayParity can help.

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