Window into Pay Transparency: Time to Display the Pay, by Helen D. (Heidi) Reavis and Ariana Zhao
The old custom of “salary upon request” is now done and dusted in New York City. Effective November 1, 2022, amendments to the New York City Human Rights Law (NYCHRL) now require covered employers to disclose the good faith minimum and maximum annual pay range of positions posted in job advertisements.
But what (or who) exactly is a “covered employer”? Who exactly qualifies as a worker or an “employee” under this new transparency legislation? And what are some of the job advertising and liability pitfalls to avoid, and how? Here is what employers need to know about this new legislation, which may have reverberations nationwide, in order to be compliant:
The New York City Commission on Human Rights (NYCCHR) has issued guidance defining “covered” employers under this law as those with four or more employees (inclusive of owners and independent contractors), or at least one domestic worker, of which at least one worker must work in New York City. The inclusion of owners and independent contractors within the scope of “employee” underscores the City’s commitment to making sure pay transparency applies broadly. Further, the four employees do not all need to work in the same location, nor do they all need to work in New York City. So long as one of the employees works in New York City, the workplace is covered, and the employer needs to comply.
It’s worth noting that whether or not the definition of “covered” employers applies to employers with solely one employee who only occasionally performs work in New York City remains an open question. Regardless, the bar necessitating compliance is low, meaning that most employers with just one employee would be considered by the NYCCHR to be included within the definition of “covered” employer.
In addition, employment agencies are also covered by the law, and employers working through such agencies must ensure that any promoted job listings also comply with the salary transparency requirements. Employers listing hourly, temporary, or part-time positions with temporary employment agencies must also comply. As such, employers won’t find any refuge in third party agencies to avoid the Pay Transparency Law’s requirements.
In terms of the text and location of job listings themselves, a covered “advertisement” is considered any publicized written description of an available job, promotion, or transfer opportunity that is presented to a pool of prospective applicants. Covered listings include even internal postings – such as internal memoranda or postings on bulletin boards – as well as internet advertisements, printed flyers, newspaper advertisements, and other such public listings. The law does not, however, prohibit employers from hiring without the use of an advertisement, creating a gray area where this law would not apply. Networking lives to fight another day!
To be compliant, “covered” employers will need to include a minimum and maximum salary level or range that they in good faith believe at the time of the listing they are willing and able to pay for the advertised opportunity. The pay range provided must be clearly defined, and cannot be open-ended, with descriptive language such as “at least” or “at most” failing to meet the requirement. Additional information such as insurance, vacation days, bonuses, etc. may be included, but is not required. We also note that words such as “junior” or “senior” are among those terms to be avoided in advertisements, as they may convey (directly or indirectly) age or other bias and be a magnet for discrimination claims later.
Since a lack of pay transparency in job advertisements may now constitute an unlawful discriminatory practice, the NYCCHR has the authority to accept and investigate complaints alleging violations of the law. A range of financial penalties may be in store for knowing violators or repeat offenders, as well as possible civil claims. As such, employers would do well to ensure they meet the pay range disclosure requirements now required under the law – and avoid deliberate or incidental word references conveying bias in hiring – in order to prevent, or at least diminish, claims from arising.
This article is intended as a general discussion of these issues only and is not to be considered legal advice or relied upon. For more information, please contact RPJ Partner Helen D. “Heidi” Reavis who counsels clients in areas of corporate operations and management, employment matters and dispute resolution, and media and intellectual property law.