New York’s Move to Pay Transparency Likely to Spread Nationally

Pay transparency is now in full effect in New York state. While parts of the state, including New York City and Westchester and Albany counties, have had pay transparency laws in effect for some time, this new law will bring pay transparency to the entire state.

The law, which applies to employers with four or more employees, requires covered employers to disclose a minimum and maximum wage range, formulated based on a good-faith belief, in job advertisements. It applies to salaried and hourly positions.

Differences in City and State Laws

The New York state law differs from the existing city and county laws in several ways. With the state law, companies are required to include a job description in the advertisement, if such a description exists. If a position will be paid solely in commissions, the advertisement should include a general statement to that effect, which marks a deviation from the existing laws.

The most significant difference between the state law and existing local laws is its reach and application to jobs that will be performed outside of the state. Additionally, the state law applies to jobs that will “physically be performed” in New York, and to jobs performed outside of the state “report[ing] to a supervisor, office, or other work site in New York.”

Some companies are confused about what it means for a position to report to a supervisor in New York. It remains unclear whether the law applies only to positions that report directly to a supervisor in New York, or if the law also applies if a skip-level supervisor sits in New York.

For New York City, employers should include pay range disclosures in posting for positions that “can or will be performed, in whole or in part, in New York City,” including positions that can be performed remotely from an employee’s home in the city. While the city law appears to apply to all remote roles that could be performed in New York City, the state law has a different reach.

The state law says it doesn’t intend to supersede or preempt local laws, which means that New York employers might have to ensure compliance with the state and any applicable local laws, depending on where in New York they operate.

Are Pay Transparency Laws Working?

At this point, it’s hard to tell whether pay transparency laws are having any specific effect on narrowing the pay gap. But the patchwork of laws that have cropped up across the country is driving some companies to be more transparent with pay practices.

Because different locations have varying requirements, some larger companies that operate across several states are opting to be more transparent to increase the administrative ease of complying with these laws. That is, it’s easier for some companies to comply by including pay ranges in all or most job postings, even if doing so exceeds their obligations under the law.

This approach can save time in determining whether each posting is subject to a pay transparency law and can help streamline compliance efforts—but it might also result in companies posting pay ranges where not legally necessary.

Additionally, some third-party job posting websites are propelling the transparency trend by assigning a pay range to job postings, even when the company hasn’t provided one. The range often represents the third party’s guess, which could be too low or too high, which might affect the applicant pool. This practice has resulted in companies assessing whether they want to control the narrative around pay ranges by posting a range even if not legally required.

Pay transparency appears to be the wave of the future. As more states consider and adopt pay transparency legislation, we likely will see more transparent practices going forward.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Kelly M. Cardin is a shareholder in the New York and Stamford offices of Ogletree Deakins, and her practice focuses on representing employers in a wide range of disputes.

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