Seeing Through the Pay Transparency Act | Holland & Knight LLP

New York City Local Law 32, known as the “Compensation Transparency Act” (law), will require employers who hire in New York to disclose the minimum and maximum annual base salary or hourly wage for employment, promotion, or transfer opportunity in any advertisement for the position beginning November 1, 2022.

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

New York City joins a growing number of cities and states that have enacted similar pay transparency laws in recent years, including Colorado, Connecticut, Maryland, Nevada, Rhode Island, Washington and California. (See Holland & Knight’s previous alert, “California Expands Pay Data Reporting and Mandates Pay Scale Disclosures”, October 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, as long as at least one of those employees works in New York. The four employees do not need to work in the same location or all work in New York. Sole proprietors and employers count towards the four employees, as do independent contractors, part-time employees, paid interns and domestic workers.

What jobs are covered?

The law applies to any advertisement for employment, promotion or transfer opportunity that can or will be made in New York. The Commission on Human Rights defines “advertisement” broadly to include any written description of an available job, promotion or transfer opportunity that is made public to a group of potential applicants, regardless of regardless of the medium on which the advertisement is broadcast. 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 offers for temporary jobs or positions that cannot, and will not, be performed in New York are excluded from the requirements of the law.

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, whether the position can or will be performed in New York, in whole or in part, whether from an office, in the field, or remotely from home. of the employee.

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 they believe “in good faith”, at the time of posting, that they are willing to pay for the advertised employment. What constitutes a “good faith” pay scale has not been defined. But the NYC Human Rights Commission provided the following guidelines:

  • The range cannot be unlimited. For example, “$15 per hour or more” or “maximum of $50,000 per year” do not meet the requirements of the law.
  • If an employer has no flexibility in the wage offered for a position, the minimum and maximum wage may be the same – for example, “$20 per hour”.
  • If an ad covers multiple jobs, promotions, or transfer opportunities, it may include salary ranges specific to each opportunity.
  • The employer is not required, but permitted, to include in the advertisement information about benefits and other types of compensation offered in connection with the advertised job opening, such as health insurance, paid vacation or not, severance pay, overtime, commissions or bonuses.

What are the potential consequences of breaking the law?

The NYC Human Rights Commission enforces the law. Employers who break the law are liable to pay damages (if any) to those harmed and to be asked to change advertisements and publications, create or update policies, organize training, to provide rights notices to employees or applicants and to engage in other forms of affirmative relief.

An employer will receive a warning for a first complaint of non-compliance, provided the employer shows that they have remedied their non-compliance within 30 days of receiving the warning. An employer may have to pay civil penalties of up to $250,000 for an initial uncorrected violation and any subsequent violations.

Conclusion and takeaways

In anticipation of the November 1, 2022 deadline, employers should review their current job posting policies and templates and take immediate action to ensure that these postings comply with the requirements of the law.

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