New York’s new salary transparency law became effective on September 17, 2023. New York employers with at least four employees must include specific details about pay, including the hourly rate, salary, or pay range, in job advertisements and descriptions. 

As a New York state employer, we know it’s challenging to stay on top of all of the recent developments in employment law. However, it’s essential for employers to understand all of the requirements of this law to avoid legal claims, fines, and other adverse consequences. The New York City attorneys at Lipsky Lowe LLP are prepared to help you put policies in place so your business complies with New York’s new salary transparency law. 

Understanding New York’s New Law on Pay Transparency

New York state’s new salary transparency law applies to internal and external job postings. The New York State Department of Labor has stated that the purpose of the law is to address discriminatory hiring and wage-setting practices and systemic pay inequity. 

Before the statewide salary transparency law, New York City, Albany, Westchester counties, and the city of Ithaca passed similar ordinances. These ordinances require employers within their jurisdiction to disclose compensation information on internal and external job postings. 

Under these local laws, small businesses were exempt from local salary transparency requirements. Now that a state-wide law has been passed, all New York employers, including small businesses, will be required to comply with salary transparency regulations. The law does not require employers to advertise for vacant positions or to use any specific medium to post job advertisements.

Salary Details Required in New York Job Postings

New York’s new salary transparency law requires employers to disclose the compensation amount or range of compensation for any advertisement for a job, transfer opportunity, or promotion. The range of compensation refers to the hourly rate or the minimum and maximum annual salary rate. The employer must include the salary information they believe in good faith to be accurate when the job advertisement was posted.

When an employee will be paid on commission, the job posting must include a general statement that compensation will be commission-based. In addition to disclosing the salary, employers must provide a description of the position, if one exists. 

How Will The Salary Transparency Law Impact Remote Jobs?

Many employers based in New York hire employees in other states for remote, work-from-home positions. Employers may think they can avoid complying with the new salary law by hiring more out-of-state workers. However, the law applies to jobs in which employees work in New York state and out-of-state positions in which the employee resides outside of New York. When an out-of-state employee must report to a supervisor, office, or another worksite in New York. 

Third-Party Job Advertisements

Employers may think they’re only responsible for including salary transparency information on job postings for which they’re directly responsible. On the contrary, all job ads must comply with the new law, including the following types of job advertisements:

  • The ad was posted by the employer directly
  • The ad was posted by a recruiter
  • The ad was posted on a job listing website

Employers now have the burden to ensure third parties comply with the new law and include the required pay range. 

Can Employers Adjust the Salary Range During the Interview Process?

Employers may be wondering how they can adjust a potential employee’s salary offer based on the applicant’s experience and education. Under the law, employers can adjust a good-faith range of salary compensation during the hiring process. Still, employers cannot misrepresent the salary range to an applicant. 

For example, suppose a job listing provides a salary range of $150,000 to $175,000. If the employer interviews the applicant and offers him or her a job for $100,000, it would be difficult to prove the employer made a good faith effort to represent what the employer is willing to pay a successful applicant. 

Helping Businesses Comply with New York’s New Salary Transparency Law

The best way to ensure your business complies with New York’s new salary transparency law is to consult with an experienced New York employment attorney. The attorneys at Lipsky Lowe LLP are prepared to carefully review all of your business’s hiring practices and find any issues that need to be addressed to bring you into compliance with the law. 

We can help you reassess your compensation policies and determine and document pay ranges for all employment positions. Our attorneys can also help you train your recruiters, hiring managers, and other human resources employees on the implications of the disclosure obligations imposed by the new laws. 

New York employers will also benefit from carefully reviewing all new job postings and conducting a pay equity audit for their current employees. Business owners are also required to keep careful records showing a history of compensation ranges for every job opportunity and the job description. 

The Penalties for Failure to Comply with the Statute

Employers who fail to comply with the salary transparent statute face civil penalties of up to $3,000. The fine amount depends on several factors, including the employer’s size, the seriousness of the violation, and whether the employer has a history of previous violations. Any person, whether a potential employee or current employee, who is a violation of the statute and has aggrieved has the right to file a complaint with the New York labor commissioner. 

However, there is no private right of action for employees to file a civil lawsuit against their employer. Employers cannot retaliate against potential or current employees because they’ve exercised their rights under the statute. The labor commission will issue rules and regulations to implement the law. 

Contact a New York City Employment Attorney

As of March 2023, all employers with four or more employees must comply with New York’s salary transparency law. If you are a business owner or manager, the attorneys at Lipsky Lowe LLP are here to help you comply with the new requirements. Contact Lipsky Lowe LLP to schedule a consultation and learn more.