Ads for jobs in New York City must include a salary range starting Tuesday, under a new pay transparency law that’s forcing employers to rethink their hiring practices and pay scales.
The legislation is aimed at improving pay transparency as a way of fighting the wage gap that leaves workers of color and women receiving lower pay on average than their White, male coworkers.
Colorado was the first state to enact a law requiring salary information in job ads, which took effect in 2021, and a handful of other cities and counties also have followed its lead, including Westchester County and Ithaca, N.Y., along with Jersey City, N.J.
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The New York City measure has raised anxieties for many employers trying to understand what’s expected of them, said Felice Ekelman, an attorney with Jackson Lewis PC in New York.
“There’s just been a lot of questions,” she said. “I’m hopeful that this is simpler than what a lot of employers think it is. Post your salary range.”
At the same time, some large US businesses have begun committing to provide pay information in all their job ads nationwide, likely pushed by the spread of transparency laws but also motivated by potential benefits to employers, Ekelman said.
“A number of employers are excited about this, believe it or not, because they think this will give them an applicant pool that will be more likely to accept an offer,” she said.
1. What information is required in job ads?
The New York City law requires an hourly pay or annual salary amount—either a fixed amount such as $20 an hour or a minimum and maximum such as $50,000 to $60,000.
An open-ended range such as “$15 per hour and up” won’t comply with the law, according to a fact sheet from the New York City Commission on Human Rights, the agency tasked with enforcing the measure.
Perhaps the biggest worry for employers is figuring out what counts as a “good faith” statement of the minimum and maximum pay for an advertised job opening, Ekelman said. It’s possible employers could advertise a salary range and then later increase it if they’re unable to find qualified candidates to accept the job at that salary, she added.
Employers aren’t required to advertise jobs before hiring.
2. What about bonuses, such as those tied to Wall Street jobs?
Unlike Colorado, the New York City law doesn’t require a description of benefits, bonuses, commissions, or other compensation. It only requires information on the base annual salary or hourly pay.
For their own recruiting purposes, employers are likely to want to include some mention of bonuses, stock-based compensation, or other forms of pay, but the city law doesn’t require it, Ekelman said.
3. Which jobs and employers are subject to the law?
The law applies to all employers with at least four employees or one domestic worker, including at least one employee in New York City. It doesn’t cover temporary help service firms recruiting workers for their labor pool.
It exempts fewer small businesses than the upcoming California and Washington state laws, which exempt businesses with fewer than 15 employees. That’s likely to yield greater pay equity benefits for New York City workers, although not as broadly as Colorado’s law which has no employer-size exemption, said Andrea Johnson, director of state policy at the National Women’s Law Center who testified in favor of the measure while the New York City Council was considering it.
“A lot of times at small employers, you have workers who are particularly vulnerable to discrimination,” Johnson said. “There’s really no reason this should not be a protection available to them as well. This is not a particularly costly or difficult regulation for employers.”
The New York City requirements cover any job that can or will be performed at least partly in New York City—whether in-office or remote work, part-time, full-time, interns, or independent contractors.
4. What are the penalties for noncompliance?
Businesses that fail to follow the pay disclosure law face potential enforcement action by the city’s human rights commission, which can fine employers a maximum of $250,000 per violation. The law also lets workers sue their current employer for violations—although it doesn’t authorize job applicants to sue a prospective employer.
Although it’s a steep potential fine, the good news is the New York City law includes a free pass on an employer’s first violation if they cure the problem within 30 days.
That’s “a really big deal because so many employers in New York are small businesses,” Ekelman said, “and so many small businesses just can’t keep up with the whole regulatory environment.”
The spread of pay disclosure laws also potentially increases companies’ risk of facing pay discrimination lawsuits, as current employees see their employers publicize how much they plan to pay new hires.
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