New York City delays effective date of pay transparency law

In January 2022, New York City enacted legislation that requires covered employers advertising jobs to include a good-faith salary range for every job, promotion and transfer opportunity advertised, beginning May 15, 2022.  Pursuant to a recent amendment, the effective date of the pay transparency law has been delayed until November 1, 2022, giving employers more time to plan to get into compliance.

When the law goes into effect, New York City will become the second jurisdiction in the US, after Colorado, to require employers to include minimum and maximum potential compensation amounts for open positions in job postings.

Below, we answer key questions relating to the amended pay transparency law:

Which employers are covered by the law?

All New York City employers with four or more workers (including employees and independent contractors) are covered.  The four workers do not need to all work in New York City.  As long as one of the workers works in New York City, the employer is covered.  

What does the law require?

The law makes it “an unlawful discriminatory practice” for a covered employer or employment agency (or employees or agents thereof) to advertise a job, promotion or transfer opportunity without stating “the minimum and maximum annual salary or hourly wage” for the position in such advertisement. In stating the minimum and maximum annual salary or hourly wage for a position, the range may extend from the lowest to the highest annual salary or hourly wage the employer believes in good faith at the time of the posting that it would pay for the advertised job, promotion or transfer opportunity.

Does the law apply to job listings for positions outside of New York City?

Pursuant to the recent amendment, the law does not apply to “positions that cannot or will not be performed, at least in part, in the city of New York.”  Job listings for positions that “could” (or “will”) be performed in New York City must comply with the law’s requirements to disclose a good-faith salary range.  As explained by a press release issued by the New York City Council, this change was intended “to ensure jobs performed virtually in New York [City] or for New York [City] employers are all covered [by the law].”

While additional guidance from the New York City Commission on Human Rights (the Commission) is expected on this carve-out, it appears that the law does not apply to jobs that definitively will not be performed within New York City.  For example, if an otherwise-covered New York City employer needs to fill a position in the employer’s physical office in Miami – and such role could not (and will not) be performed by an employee sitting in New York City – it appears the employer would not need to comply with the law’s requirements to disclose a good-faith salary range in any advertisement for such role. 

Conversely, the law’s requirements to disclose a good-faith salary or hourly wage range in any advertisement appears to apply to (a) covered New York City employers hiring for fully remote positions because such a role hypothetically could be filled by an employee sitting in New York City and (b) positions where the employee may be required periodically to come into New York City, such as a generally remote/hybrid position that requires occasional attendance at the employer’s New York City offices for meetings.

Are there any exemptions to the pay transparency law?

The law does not apply to temporary help firms seeking applicants to join their pool of available workers.  However, covered employers who work with temporary help firms must comply with the law.

Who may file a complaint for violations of the law?

Pursuant to the recent amendment to the law, only "current employees” may bring private lawsuits for violation of the law (ie, in relation to job postings by their employers).  As explained by the aforementioned New York City Council press release, this change was intended to “strike a balance between small businesses’ fears that they will be needlessly sued and pay equity advocates’ concerns that current employees be able to seek damages in court as appropriate.”

What are the potential civil penalties for violating the law?

A covered employer is subject to a civil penalty of $0 for a first violation if it proves to the satisfaction of the Commission, within 30 days of the service of a complaint, that the violation has been cured.  According to the statute, the submission of proof of a cure, if accepted by the Commission as proof that the violation has been cured, shall be deemed an admission of liability for all purposes.  Absent a cure, penalties can range up to $250,000 for violations that are the result of willful, wanton or malicious conduct.  Additionally, covered employers may also be required to amend advertisements and postings, create or update policies, conduct training, provide notices of rights to employees or applicants, and engage in other forms of affirmative relief. 

Prudent employers will continue to closely monitor developments relating to the New York City pay transparency law.  We anticipate that additional guidance interpreting its practical application will be issued by the Commission.

Please contact the authors of this alert, your DLA Piper relationship attorney or any member of the DLA Piper Employment group with questions regarding New York City’s new pay transparency requirements.