As of November 1, 2022, most employers in New York City must comply with the City's new pay transparency legislation. The legislation amends the N.Y. City Human Rights Law ("NYCHRL"), requiring covered employers to include pay information in all job postings.
Covered Employers:
The law covers all employers who have at least four employees, at least one of whom works in New York City. The law also covers entities that employ at least one domestic worker (i.e., an individual who works in a person's home to care for their child or dependent).
Job Advertisements That Must Include Salary or Wage Range
In general: the law requires any advertisement for a job that may be performed in whole or in part in New York City must include salary and/or wage information. This includes ads for jobs that may be performed “remotely” from an employee’s home situated within New York City. Accordingly, employers should carefully consider their job postings for remote positions if the ad will reach candidates in New York City.
City guidance defines an "advertisement" to mean written description of an available job, promotion, or transfer opportunity publicized to a pool of potential applicants. These would include a company's online job postings, postings on job-search sites, printed ads and flyers, and internal bulletin boards.
Pay range information is required on advertisements regardless of whether the job is for a full- or part-time position. Employers must use a “good faith” effort to list an accurate pay range.
Organizations that hire contractors should also evaluate their job-advertising practices, considering the City's position that pay information should be included in job postings for any category of worker covered by the NYCHRL, including independent contractors in certain circumstances.
Importantly: employers do not need to provide pay information if the job is not advertised. In other words, employers do not need to create a job advertisement before hiring.
Pay Information Required on Job Advertisements
Job ads must include the employers' "good faith" understanding of the "minimum and maximum" pay range for the position. The City guidance on the law emphasizes both minimum and maximum must be provided. A job posting that only provides the ceiling or floor for pay would violate the law's requirements. Further, the law's requirements apply regardless of whether the job is to be paid salary or hourly.
Certain information does not need to be included, such as:
- Insurance benefits
- Paid time off, including sick leave or vacation leave
- Retirement benefits
- Overtime benefits
- Potential severance pay
- Other compensation, such as tips, bonuses and stocks.
Enforcement
The City Commission on Human Rights will maintain jurisdiction to investigate and penalize employers who violate the law. The Commission also has authority to order employers to pay monetary damages to affected employees.
The City's guidance specifies that employers may have to pay "up to $250,000" for "uncured" violations of the new law.
Individual employees may also file complaints in court against their current employer if they believe their employer did not properly post pay information on an advertisement for a new job, promotion or transfer opportunity.
Impact and Planning
Employers with at least one employee in New York City should evaluate whether their future job postings must include a pay range—especially when posting for “remote” positions that could, conceivably, be performed by an NYC-based worker.
The City legislation is the latest in a series of pay-transparency laws throughout the country. Employers with locations in multiple jurisdictions should continue to monitor whether their business is covered by a growing patchwork of state or local pay-transparency laws.
New York State, for example, has passed its own pay transparency legislation -- but it has not been signed into law. The bill has cleared both the State Assembly and State Senate but has not yet been sent to the Governor's office for signature. If signed, the law would go into effect 270 days later.
Impact on Labor Certifications for Foreign National Employees
The new law may have cascading effects on other areas of personnel and HR-compliance. Employers with immigrant workers, for example, could be impacted by the new law. The labor certification (or “PERM”) process required for most permanent residency sponsorship applications requires employers test the labor market to determine whether any qualified, willing and able U.S. workers are available to fill the job before it is offered to a foreign national on a permanent basis.
Before a labor certification can be filed, the employer first must obtain a Prevailing Wage Determination from the Department of Labor, a process that currently takes approximately eight months. Once issued, a Prevailing Wage Determination defines the prevailing wage that must be paid to the foreign national employee upon the granting of permanent residency.
In addition to obtaining a Prevailing Wage Determination, the labor certification process requires the employer recruit for the job being offered to the foreign national. At a minimum, this requires the employer run a web-based job order with the State Workforce Agency where the individual will work, as well as two Sunday newspaper print ads in the newspaper of general circulation in the area of intended employment. In addition, if the job opening is for a professional position, the employer must run three additional ads from a list of ten different types of advertisements, including the employer’s website, job fairs, campus placement offices, via a referral program with incentives, radio and television ads, etc.
Each ad must contain the name of the employer, instructions for submitting one’s resume, a general description of the vacancy, and a description of the geographic area of employment. The ads need not list any wage at all, but if a wage is listed, it must not be lower than the prevailing wage rate assigned by the Department of Labor in the Prevailing Wage Determination, and must not contain wages that are less favorable than those offered to the foreign national on whose behalf labor certification is sought.
From an administrative standpoint, the simplest practice is not to include wages in job ads, and not to start the recruitment process until after the Prevailing Wage Determination has been issued. There are several reasons for this strategy, including the following:
- Labor certification applications must be filed no more than 180 days after the first advertisement began to run. Prevailing Wage Determination processing times are unpredictable and can fluctuate. If processing times slow down, this could lead to some ads expiring and needing to be redone.
- If the Prevailing Wage Determination comes back at a higher salary than whatever is listed in the internal Notice of Filing (posting notices), then the Notice of Filing will also need to be redone, which could delay the filing of the labor certification significantly.
- If the Prevailing Wage Determination comes back at a wage that is in the wrong occupational classification, there will not likely be time to challenge it before the ads expire.
But with competing requirements under new pay transparency laws, employers recruiting foreign workers may need to reevaluate their job postings — potentially resulting in delays in hiring foreign workers if ads are not properly crafted at the outset.
As noted above, the New York City wage transparency law requires that wages or salary on job advertisements are listed in the form of a range. By contrast, the U.S. Department of Labor’s PERM regulations permit employers to list either the actual salary offered or a pay range. According to the preamble of Final Rule implementing the current labor certification guidelines, if a salary range is used, the bottom end of the range must not be lower than the higher of the prevailing wage and the wage actually being paid to the foreign national if currently employed by the company. Thus, if an employer were to start recruitment prior to issuance of the Prevailing Wage Determination, and the prevailing wage turns out to be higher than the bottom end of the wage range listed in any of the ads, those ads will need to be redone.
