The State of New York’s pay transparency law took effect on September 17, 2023. The law requires employers to provide information on compensation in all job announcements. The State of New York follows numerous other states and localities, including New York City, in requiring pay transparency for applicants and employees.
Applicability of Pay Transparency Law
The State of New York’s pay transparency law applies to all organizations that have four or more employees. The law covers job announcements for openings where the work will be performed in the State of New York. The law also covers job announcements for openings where an employee is located outside of the State of New York, but the employee will report to a “supervisor, office, or other work site” in New York. The pay transparency law applies to both internal and external openings.
Fact sheets produced by the State of New York define the type of job announcements where the pay transparency law applies.
- The law covers job announcements that are shared with more than one person.
- Job announcements covered under the law may include newspaper advertisements, social media postings, website postings, announcements sent through electronic mailing lists, and e-mails.
The pay transparency law does not require employers to make job announcements for open positions. Instead, the law applies when an employer actually advertises an opening in some manner to the public and/or to employees.
Compensation and Other Information to Include
The State of New York requires job announcements to include “the compensation or a range of compensation” for the open position. The law states that “range of compensation” means:
“[T]he 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.”
An employer can list either the expected fixed-rate compensation for the opening or the expected range. The employer is not allowed to provide an open-ended range such as “minimum of $75,000.” The compensation listed for an open position must exclude any other forms of compensation such as bonuses, tips, or expected overtime. Employers are allowed, but not required, to provide information on these other forms of compensation. Unlike some pay transparency laws, the State of New York does not require employers to provide information on benefits. When an employer has multiple openings included in one job announcement, the pay range for each individual opening must be listed if the openings have different ranges.
Along with compensation information, job announcements must include a “job description” if such a description exists. One of the New York fact sheets states that employers must create a job description unless the job title clearly conveys the duties of the job. The pay transparency law does not define the term “job description,” and it does not appear that employers must develop formal job descriptions or include all provisions within their formal job descriptions in job announcements.
In situations where a job announcement does not have sufficient space to include all required information, a New York fact sheet states that the employer may post the complete information in a “separate location.” The information must be easily accessible and must be free of charge to access.
Use of Third Parties and Good Faith Efforts to Comply
The provisions of the State of New York’s pay transparency law apply to job announcements made by an employer as well as an “employment agency, employee, or agent” of the employer. The law does not apply to situations where an employer uses a temporary help firm to find contingent workers. If another organization that is not acting on behalf of the employer re-posts a job announcement, the employer is not responsible for ensuring compensation information is included in the re-posted announcement.
The State of New York expects that employers will make good faith efforts to comply with the pay transparency law. The employer is required to include the pay range that it “legitimately believes” will be paid in a job announcement. Employers should consider the job market, current employee compensation levels, hiring budget, and experience and education levels when establishing a pay range.
FAQs and the Fact Sheets released by the State of New York recognize that there will be situations when an employer offers a candidate more than the maximum amount found in a job opening. There may also be situations where the pay range shown in a job announcement must be adjusted after an employer begins accepting candidates. Employers should avoid offering candidates a salary below minimums shown in job announcements and should avoid lowering the pay range in job announcements after candidates begin to apply.
Noncompliance with New York Pay Transparency Law and Interactions with Other Laws
There are potential financial penalties for failure to comply with the State of New York’s pay transparency law. Employers may face a civil penalty up to:
- $1,000 for a first violation
- $2,000 for a second violation
- $3,000 for a third or any subsequent violation
The refusal to interview, hire, promote, or employ an individual, or any retaliation against an individual who exercises rights under the pay transparency laws, may result in one of the civil penalties noted above.
The State of New York’s pay transparency explicitly states that it does not supersede or preempt any local law, rule, or regulation. Thus, employers subject to the pay transparency laws in other State of New York localities including Albany County, the City of Ithaca, and New York City, must continue to comply with those laws.