New York State Enacts Pay Transparency Law
On December 21, 2022, Governor Hochul signed into law S.9427-A/A.10477, which requires all private sector New York employers to list salary ranges for all advertised jobs and postings. This law takes effect on September 17, 2023.
This New York State development follows in the footsteps of a similar New York City requirement, which went into effect on November 1, 2022 (and which we covered here), as well as similar initiatives in Albany, Ithaca, and Westchester County, which also came into existence in 2022, among the many others from around the country. The New York State law effectively extends similar requirements to nearly all employers with a presence in in the state, but it also includes some notable differences that NYC and other employers should appreciate. We cover the law and its provisions in detail below.
Codified in the New York Labor Law as §194-b, the law requires New York employers with four or more employees who advertise for a job, promotion, or transfer opportunity that can or will be performed, at least in part, in New York, to disclose:
- The compensation or a range of compensation for such job, promotion, or transfer opportunity; and
- The job description for such job, promotion, or transfer opportunity, if such description exists.
Importantly, the State law does not require employers to disclose additional information such as a general description of employee benefits, or information about bonuses, equity, or additional employee compensation for successful applicants, departing from the approach taken by some jurisdictions such has Colorado and Washington.
Further, advertisements for positions “paid solely on commission” are deemed compliant with the law’s range of compensation requirement by “disclosing in writing in a general statement that compensation shall be based on commission.” The law does not elaborate any further on what must be included in this “general statement.”
Similarities and Differences with the NYC Law
The law closely tracks its NYC counterpart in several respects. First, it defines the “range of compensation” to be disclosed as the “minimum and maximum annual salary or hourly range of compensation … that the employer in good faith believes to be accurate at the time of the posting of an advertisement for such opportunity.” Second, and similar to the NYC law, it covers any job, promotion, or transfer opportunity “that can or will be performed, at least in part, in the State of New York.” This means that while the law, in theory, could cover postings for remote positions and/or apply to candidates outside of New York State, the posted position must still be performed “at least in part” in the state to be covered. Third, the law also excludes temporary help firms—as defined by the New York Labor Law—from the definition of “employer” under the law.
But the New York State law also goes further than the NYC law in key ways. First, it requires that New York State employers disclose the job description applicable to the posted position if one exists. Note, the law does not require employers to create job descriptions, only to disclose them if they do exist. Second, covered employers are required to maintain “necessary records,” which the law defines as records “including, but not limited to, the history of compensation ranges for each job, promotion, or transfer opportunity and the job descriptions for such positions, if such descriptions exist.” This is a notable difference from the NYC law, which does not contain any similar records retention requirements. Although the law outlines a non-exhaustive list of some of these “necessary records,” it does not explicitly state how long employers must maintain such records. Clarifications will hopefully be addressed in guidance released by the New York State Department of Labor (“NYSDOL”) in advance of the effective date, as the NYSDOL is directed to issue rules and regulations relevant to the new law. It bears noting that the New York Labor Law does contain record retention requirements applicable to “payroll records,” which employers must maintain and preserve for 6 years, and which NYSDOL could in theory extend to encompass these “necessary records.”
The Law Protects Employees from Retaliation But Does Not Include a Private Right of Action
The newly enacted law protects individuals from retaliation for exercising their rights under the law’s provisions. While the New York State law does not include a private right of action, it provides that “any person claiming to be aggrieved by a violation” can file a complaint with the NYSDOL, including current employees and job applicants. This approach differs from the NYC law, which provides a limited private right of action to current employees, but not job applicants. Employers that violate the law could be subject to civil penalties under Section 218 of the New York Labor Law.
The Law Does Not Preempt Local Wage Transparency Laws
The law explicitly provides that it does not supersede or preempt local laws. This would include NYC’s wage transparency law as well as pay transparency laws in Albany, Ithaca, and Westchester County. However, it is worth noting that Westchester County’s law contains a provision providing that it will become “null and void” if Statewide legislation is enacted that incorporates “the same or substantially similar provisions.” The Westchester County Legislature is responsible for determining whether New York State’s bill is “identical or substantially similar” for the purposes of triggering the “null and void” provision, so employers with a presence in Westchester County should monitor Westchester County developments on this point.
We will also continue to monitor for further guidance from the NYSDOL, and update this post accordingly. In the meantime, we encourage employers to take the following steps to comply with requirements unique to this law, and other pay transparency best practices:
- Evaluate Recordkeeping Protocols and Procedures – This New York State law requires employers to maintain a “history of compensation” for posted positions and job descriptions (to the extent they exist). Employers should consider assessing how they store, aggregate, and categorize compensation history information for each job opportunity or position they advertise.
- Review Job Descriptions that Exist – Given that the New York State law requires disclosure of existing job descriptions, and as we noted in our earlier post covering NYC’s law, employers should consider updating job descriptions to ensure that the description clearly identifies the position, where it can be—or must be—performed, along with any other information required by this law and relevant to the compensation range or listed salary.
- Take Note of Similar Measures in Other Jurisdictions – Employers operating in jurisdictions outside of New York State should take note of whether other similar state laws apply (or may eventually apply) to them. As noted above, Colorado and Washington now require employers to provide more information than New York, including a general description of any bonuses, commissions, benefits, or other compensation the employer is offering. California has enacted a law (effective January 1, 2023) which requires additional steps of employers, as outlined here. Employers who are willing to fill a role with someone working in these jurisdictions, for example, should be mindful of fashioning their job postings accordingly.
- Pay Equity Compliance – In posting this information and increasing visibility around employee wages, employers should consult with counsel to ensure they are in compliance with applicable equal pay laws.
Mintz’s Employment, Labor, and Benefits team stands ready to assist with any compliance concerns you may have.