The New York Department of Labor (NYDOL) has issued proposed regulations related to New York’s Pay Transparency Law, which are open for comment until November 12, 2023. In addition, the NYDOL issued a fact sheet and a set of frequently asked questions and answers for employers that mirror the information in the proposed regulations.

As we discussed in our prior alert, the New York Pay Transparency Law requires employers with four (4) or more employees to provide salary or pay ranges and job descriptions for all advertised jobs and promotions in New York, whether posted inside the organization or to the public at-large. This law went into effect on September 17, 2023.

The proposed regulations and guidance, issued on September 13, 2023, provide additional clarification regarding employers’ obligations under the law including: (a) what constitutes a job posting having an “impact” in New York; (b) what information employers must disclose in such postings for jobs, promotions or transfer opportunities; (c) what is a good-faith pay range and when employers are justified in offering a candidate more than the pay range posted; and (d) details about enforcement.

Job Postings

Job postings covered by the law include a newspaper advertisement, a printed flyer that is either distributed or displayed, a social media post, an e-mail sent to a pool of applicants (more than one potential applicant), an e-mail, electronic job board, or other electronic communication, or an advertisement posted through any other medium for opportunities that have an impact in New York. The law applies whether the posting is made by the employer directly or through a third party. However, employers are permitted to hire, promote, or transfer employees without a posting because the law does not require employers to create a posting for every available job, promotion or transfer opportunity.

The opportunities that will be considered as having an impact in New York include those that are posted internally or externally and if the work is to be physically performed, at least in part, in New York. Also subject to the law are opportunities for positions that report to a supervisor, office or worksite in the State of New York, even if the position is remote. Those positions that require only incidental or infrequent meetings within New York State, such as a conference or occasional meeting, are not covered by the law.

Information in Postings

If the law applies, then the job posting must include a job description and a good faith pay range. The job description should contain a description of the primary duties and responsibilities of the position. There is a limited exception to this requirement when the job title clearly conveys the duties. As an example, the proposed regulations use “dishwasher” as a position for which a job description would not be required.

The good faith pay range must reflect the base rate of pay (not benefits or other compensation, such as tips, bonuses, or commissions). The range may not be too broad. The range of compensation may not be open ended, such as “$20 per hour and up” or “maximum $50,000 per year.” If an employer has no flexibility in the rate or salary they are offering, the fixed rate or salary may be simply stated, for example, as “$20 per hour,” or “$50,000 per year.”

The proposed regulations indicate that a base rate of pay would be “an annual salary, an hourly wage, or a piece rate.” If an advertisement covers multiple locations or levels of seniority, then the pay range should be provided for each variation of the position.

The NYDOL’s FAQ provides the following example information, listed in the form of a two-column chart, regarding plant manager locations and range of pay:

• Westchester County, $100,000-$125,000
• Erie County, $75,000-$90,000
• Clinton County, $75,000-$90,000

The range would be considered to be made in good faith if it is what the employer is willing to pay a successful applicant for the position at the time it is posted. The proposed regulations provide that the employer may consider the following factors when determining the range: “the current job market, current employee compensation levels, hiring budget, experience and education levels.” However, the employer is permitted to increase its hiring budget or offer a higher base pay if the employer receives an application that exceeds the expected qualifications for the position. An employer may also increase the amount offered if after posting the position but prior to making an offer, the employer institutes a companywide increase in pay that also causes the posted range of compensation to increase.

The proposed regulations specify that the posting does not need to include: “(1) health, life, or other employer-provided insurance; (2) paid or unpaid time off, sick days, vacation days, leaves of absence, or sabbaticals; (3) the availability of, or contributions towards, employer-sponsored retirement or savings plans; (4) severance pay; (5) overtime pay; or (6) other forms of compensation such as commissions, tips, bonuses, stocks, or the value of employer-provided meals or lodging.”

Notably, for tipped positions, employers may mention tips as a part of compensation as the proposed regulations note, “by stating ‘$18 an hour plus tips,’ or ‘$18 an hour plus an estimated additional $10 per hour in tips.’” However, an employer may not include tips or other compensation in the range itself. For example, an employer may not state, “$28 per hour including expected tips.” While the regulations do not address the tip credit, for tipped positions, the pay range should not be less than the regular minimum wage and the posting should indicate that the position is a tipped position subject to the applicable statutory tip credit.

Enforcement

Although individuals may not file a lawsuit in court pursuant to this law, a current, prospective, or potential employee or applicant who claims to be aggrieved under the law may file a complaint with the NYDOL. In addition, an organization acting on behalf of an aggrieved person, or the recognized and certified collective bargaining agent acting on such a person’s behalf, may file a complaint with the NYDOL. The New York Commissioner of Labor may also initiate their own investigations.

As noted in our prior alert, all New York City employers with four or more employees and employment agencies regardless of their size must comply with both the New York State and New York City salary transparency requirements. The City law took effective on November 1, 2022.

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