New York Becomes the Latest State to Require Salary Transparency in Job Postings

On December 21, 2022, Governor Kathy Hochul signed New York State's compensation transparency bill into law, making New York the fourth state to enact wage transparency requirements for job postings. This statewide law follows the pay transparency trend already seen at the local level in New York and in other states across the country. The new law will take effect on September 17, 2023.

Like its New York City counterpart, the new state law applies to employers located in New York State with four or more employees. However, at present, it is unknown whether this means that all four employees need to be employed within New York State or whether an employer is covered if it employs four employees regardless of location.  The law requires such employers to disclose the compensation range in advertisements for all positions that can be performed, at least in part, in New York State. The law expressly covers any job that can be performed in the state, so it likely applies to postings for all remote work that can be done from New York.

The law further requires that employers include a compensation range in all advertisements for new jobs, promotions and transfer opportunities. Compensation range is defined as “the minimum and maximum annual salary or hourly range of compensation for the…opportunity that the employer in good faith believes to be accurate at the time of the posting of an advertisement for such opportunity.” Differing from the New York City law, advertisements for jobs that are paid solely on commission must include a general statement that the position is in fact commission-based.

Unlike the New York City law, the state law provides that if a job description exists for the position, it must be included in the posting. The law does not define “job description” and does not appear to require an employer to create such a description for a position in order to advertise for it. The law includes a record-keeping provision requiring employers to maintain records of the history of compensation ranges for each position, as well as job descriptions for each position to the extent they exist.

The New York State law includes an anti-retaliation provision that prohibits an employer from refusing to interview, hire, promote, or employ an applicant or current employee for exercising any right provided by the law.

The New York State law does not expressly create a private right of action for violations of the law. It provides, however, that violations are subject to investigation and prosecution by the state commissioner of labor, with civil penalties not to exceed $1,000 for the first violation, $2,000 for the second violation and $3,000 for the third and subsequent violations.

The NY Department of Labor is authorized promulgate regulations to clarify this law, so we expect the commissioner to issue guidance on the law in the coming year.

As pay transparency laws have proliferated nationwide, it has become a topic that employers cannot avoid. New York employers should begin preparing for the September 2023 effective date by ensuring that their human resources and compensation departments, as well as third-party employment agencies, are informed of the new requirements. Employers should also take steps to determine and document compensation ranges using existing data or projecting figures on a good-faith basis. Furthermore, employers should anticipate requests for salary reviews by current employees and consider how to respond to those through existing or new internal practices. 

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.