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New York State Enacts Pay Transparency Law

 Key Takeaways:

  • New York enacts statewide pay transparency law.

  • The law goes into effect on September 18, 2023.

  • Employers with four or more employees are impacted.

On December 21, 2022, Gov. Hochul signed Bill A10477/S9427A into law, which goes into effect on September 18, 2023, that will make New York the fourth US state to require salary ranges with job postings.

New York’s pay transparency law is part of a growing number of measures being enacted across the US that seek to close a persistent wage gap among white men, women and people of color. Employers are undoubtedly already familiar with New York Labor Law Section 194-a, which we previously reported on in 2019 that banned employers from inquiring or relying on salary history data in employment decisions. The new law, A10477, creates New York Labor Law Section 194-b, and purports to further New York’s goal of reducing wage disparities in the workforce. Covered employers include those with four or more employees. However, temporary staffing agencies are exempt from the law.

The law requires that when a covered employer advertises a job, promotion, or transfer opportunity that can or will be performed in New York State, at least in part, the employer must disclose the compensation or range of compensation. The law does not require that the employer create a job description, but if a job description exists, it must also be made available. Advertisements for commission-based jobs must merely include a general statement that the compensation structure is commission based.

The “range of compensation” is defined as the minimum and maximum annual salary or hourly range of compensation for a job, promotion, or transfer opportunity that the employer in good faith believes to be accurate at the time of the posting of an advertisement for such opportunity.

The law further imposes recordkeeping requirements on employers that include the history of compensation, ranges for each job, promotion, or transfer, and the job description for each position (to the degree they exist).

As with virtually any employment law, there is a strong anti-retaliation provision prohibiting employers from refusing to interview, hire, promote, employ, or otherwise retaliate against an applicant or current employee for exercising any rights under this law. Aggrieved individuals may file a complaint with the New York Department of Labor. Employers that fail to comply with the law may be subject to civil penalties.

The law has several noticeable ambiguities. It does not define “job description” or clarify whether it includes any explanation of the job, no matter how informal the description. The law also does not define “advertisement” and its breadth. It also does not create any sort of commentary on union environments and collective bargaining agreements which might impose rules relating to hiring, promotion, or transfer. While the law imposes a “good faith belief” for the range of compensation, it is unclear if there are any true limits to the size of the range. The New York State Department of Labor is authorized to release rules and regulations that will hopefully clear up these ambiguities.

Notably, the law also indicates that it does not supersede or preempt any provisions of local laws, rules, or regulations. Accordingly, employers that live in jurisdictions with already existing local laws in this area (e.g. New York City) will need to comply with both the state and local laws.

While this law does not go into effect for several months, employers are advised to start preparing for compliance.

For more information or immediate guidance, contact: