Attention New York City Employers: Guidance is Now Available for the Salary Disclosure Law and Possible Amendments May be on the Horizon
As we previously reported, the Law requires New York City employers with four (4) or more employees to disclose minimum and maximum salary information in job postings, promotions, and transfer opportunities. The Law is currently scheduled to take effect on May 15, 2022.
Two (2) days after the Commission issued the Guidance, a new bill (Int. 134) (the “Bill”) was introduced to the New York City Council on March 24, 2022 that, if passed, would significantly amend the Law, including pushing back the effective date to November 1, 2022.
As noted above, the Law applies to New York City employers that employ four (4) or more persons, and also any New York City employer that employs one (1) or more domestic workers. For purposes of counting “employees” toward the above threshold, employers must count independent contractors, as well as an individual employer’s parent, spouse, domestic partner, or child working for the employer. The Guidance clarifies that owners count towards the four (4) person threshold and that all employees, regardless of work location, must be counted. Therefore, to be a covered employer under the Law, an employer need only have one (1) employee who works in New York City. Under the Bill, this threshold would be increased to fifteen (15) or more persons.
The Guidance provides that employment agencies are covered by the Law, regardless of size. That being said, the Law does not apply to temporary help firms seeking applicants to join their pool of available workers. Notably, employers who work with temporary help firms must abide by the Law.
Covered Job Postings
The requirement to disclose the salary range applies to any “advertisement” for a job, promotion, or transfer opportunity (including internal postings). An “advertisement” is defined in the Guidance as “a written description of an available job, promotion, or transfer opportunity that is publicized to a pool of potential applications.” This includes, but is not limited to, postings on internal bulletin boards, internet advertisements, printed flyers distributed at job fairs, and newspaper advertisements.
The Guidance states that the Law applies to any opportunity that “can or will be performed, in whole or in part, in New York City, whether from an office, in the field, or remotely from the employee’s home.” Therefore, a covered employer should post the required salary information for any position that could be performed, in whole or in part, remotely by a New York City resident, which has broad implications given that more and more employees are working remotely since the beginning of the COVID-19 pandemic. If passed, the Bill would limit the Law to expressly exclude “[p]ositions that are not required to be performed, at least in part, in the city of New York.” In other words, if a job could be performed entirely remotely from any location, then the Bill would not require covered employers to provide salary ranges in the job advertisement.
Required Salary Information
The Law requires employers to post the minimum and maximum “salary” that the employer in “good faith” believes it would pay for any advertised position. The Guidance explicitly provides that a salary range cannot be open ended. For example, an advertisement that provides for a salary of a “maximum of $50,000 per year” would not comply with the Law. The Guidance also recognizes that the minimum and maximum salary may be identical where an employer does not have any flexibility in the salary it is willing to offer for the opportunity.
The Guidance states that “salary” includes “the base wage or rate of pay, regardless of the frequency of payment” and does not include other forms of compensation or benefits, such as: health insurance, paid time off, availability of or contributions towards retirement funds, severance pay, overtime pay, commissions, tips, bonuses, and stock or equity awards. Further, “good faith” means “the salary range the employer honestly believes at the time they are listing the job advertisement that they are willing to pay the successful applicant(s).”
Enforcement of the Law
The Law allows any applicant or employee to enforce their rights in the same way other violations of the New York City Human Rights Law are addressed by filing a complaint with the Commission or in court. The Guidance notes that the Commission will investigate complaints of violations of the Law, but will also have the power to initiate its own investigations “based on testing, tips, and other sources of information.” Additionally, the Guidance provides that employers and employment agencies that violate the Law may have to pay monetary damages to affected employees and civil penalties of up to $250,000, as well as amend advertisements, create or revise policies, conduct training, and provide notices of rights to employees or applicants.
Overall, covered employers should carefully review the Guidance and speak with counsel to prepare to comply with the Law as of the May 15, 2022 effective date. Further, employers should consider the effect that the disclosures will have on current employees as the disclosures may provide employees with new pay transparency information that could cause an uptick in employee complaints and negatively impact employee retention rates. New York City employers should also stay up-to-date with the potential passage of the Bill and any other developments.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.