What to Know About NYC’s New Pay Transparency Law

Starting Tuesday, most New York employers will have to follow new rules about disclosing salary ranges in job postings, in an effort that fair pay advocates say will narrow pay gaps for workers. women and people of color.

The law makes New York the largest municipality in the United States to mandate pay transparency for external and internal job postings. A similar law passed by the state legislature this year could go into effect if signed by Governor Kathy Hochul.

While elected officials and workers have applauded the law as a step toward fairness in the workplace, the city agency tasked with responding to allegations of violations of its rules is woefully understaffed, the councilwoman said. Gale Brewer, raising doubts about the full application of the law.

“It’s good law,” said Brewer, who chairs the council’s investigations committee. But, she added, the lack of staff “is a big problem”.

Here’s what you need to know about the new pay transparency law.

What is the law intended to correct?

Across industries and in municipal government, women are paid less than men in similar roles, and people of color are paid less than white workers, according to government reports.

The wage gap in New York state between men and women has widened in recent years, according to a March state comptroller report. In 2019, the latest year studied by the report, the median salary for male managers in New York City was $100,000, compared to $80,280 for women.

In the city’s municipal workforce, the median salary for men is $83,201 and $60,327 for women, according to a September city council report. Compared to every dollar earned by white employees in the city, Asian workers earn 85 cents; Hispanic workers earn 75 cents; and black workers receive 71 cents.

“This is a situation in which people are chronically underpaid,” said Esta Bigler, director of the labor and employment law program at the School of Labor and Industrial Relations Cornell University at NY1. “And once you’re underpaid, it’s almost impossible to make up the deficit you have over your lifetime.”

Other reports suggest that the COVID-19 pandemic may have widened wage gaps, as black unemployment remains significantly higher than average and a significant drop in female labor force participation.

How does the law work?

The law requires all businesses or employers of covered domestic workers to list “good faith” pay scales for any posting of a new job, promotion, or transfer opportunity for New York-based positions. The law covers remote jobs and part-time jobs.

“‘Good faith’ means the salary range that the employer honestly believes at the time of posting the job offer that he is willing to pay the successful candidate(s)”, according to the city’s fact sheet on the law.

Any business with four or more employees (including the owner) and at least one employee working in New York is covered by the law. The law also covers any employer of at least one domestic worker.

In job postings, employers must post lower and upper salary estimates wherever they advertise the position. The posting does not have to include other benefits, such as health care or overtime.

How do I report violations and what are the penalties?

To submit anonymous reports of potential violations of the law, call the city’s Human Rights Commission at (212) 416-0197, or fill out this form.

Companies found to have broken the law will initially have 30 days to remedy the violation. If an employer does not resolve a violation, they may have to pay up to $250,000.

Potential workers and employees can also sue companies in civil court for alleged violation of the law.

How effective will the municipal application be?

City agencies are experiencing historic labor shortages, struggling to retain workers who want more flexibility to work from home or attract new workers with existing wage structures.

The Human Rights Commission, which is tasked with investigating violations of city labor rules like the Pay Transparency Act, as well as housing discrimination, has perhaps the most high proportion of vacancies from all city offices, Brewer said.

In June, she said, its headcount was 99 out of 136 budgeted positions, a vacancy rate of about 27%. The understaffing, she said, could not only affect the agency’s ability to respond to complaints, but also conduct proactive investigations to seek out instances of pay transparency law violations.

“A really good commission would look at some of these companies and do some research,” she said. “I’ve been worried about it since day one.”

Brewer said the council, which has held several hearings on the city’s issues with retaining and recruiting new workers, hopes to increase funding in next year’s budget for key agencies.

The Human Rights Commission did not respond to a request for comment.

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