Update Applicable to:
All employers with four or more employees and at least one who works in New York City
In our previous communication, we informed you about the New York City Pay Transparency Law that was passed on December 15, 2021. This is an update to that law.
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What are the details?
On March 28, 2022, the New York City Commission on Human Rights released official guidance regarding the upcoming pay transparency law, Int. 1208-B, which requires all advertisements for jobs, promotions, and transfer opportunities for positions performed in the city to include a minimum and maximum salary range. This law was passed by the City Council and will go into effect on May 15, 2022.
In addition, amendments to the law have recently been introduced in the New York City Council (T2022-5021 (Bill)) which, if passed, will modify the law in important ways, including delaying its effective date and further clarifying its requirements.
The law currently applies to all New York City employers that employ four or more persons with at least one person working in the city. The bill would increase the threshold to employers that employ 15 or more persons. Under both, employers must include independent contractors furthering the employer’s business as well as an employer’s parent, spouse, domestic partner, or child working for the employer in the count of persons when determining whether the law applies to their business. The guidance clarifies that all employees regardless of work location must be counted and that only one must work in the city for an employer to be covered.
Clarification of the Term “Salary”
The law requires employers to post the minimum and maximum “salary” that the employer in good faith believes it would pay for any advertised position. The guidance explains that the term “salary” encompasses base wages (e.g., $15 per hour) and other rates of pay (e.g., $50,000 annual salary) and states that the range cannot be open-ended (e.g., $15 per hour and up). The bill, however, would amend the law to explicitly make clear that the requirement applies to non-exempt employees who are paid an hourly wage, by stating that employers must post the minimum and maximum “hourly or salary compensation… .”
The guidance further explains, “[s]alary does not include other forms of compensation or benefits offered in connection with the advertised [position]” and gives examples of compensation that does not need to be included, such as:
- commissions, tips, bonuses, stock, or the value of employer-provided meals or lodging
- overtime pay
- benefits (including group health benefits, retirement benefits, and paid or unpaid time off)
- severance pay
In other words, only the base wage or salary for the advertised position must be stated.
The guidance advises employers (irrespective of location) to abide by the law, “when advertising for positions that can or will be performed, in whole or in part, in New York City, whether from an office, in the field, or remotely from the employee’s home.” Thus, employers who have at least one employee in New York City should remain mindful of the need to post salary ranges even for remote positions, if the job might be filled by a city resident.
The Bill proposes to amend the law to expressly exclude “[p]ositions that are not required to be performed, at least in part, in the city of New York.” This additional exclusion appears to eliminate the need to include the pay transparency notice for fully remote positions where work is not required to be performed in New York City, which appears to address concerns raised by Colorado’s similar pay transparency law.
The bill also proposes to amend the law to eliminate the requirement for posting a salary range when the posting is a general “help wanted” sign without reference to a particular position.
As it stands, the law becomes effective beginning May 15, 2022. The bill would push back this effective date to November 1, 2022.
The City Council is holding a hearing on April 5, 2022, to further discuss the bill.
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For more information, please see the links below:
Vensure Legal Update (December 28, 2021)
Article 1 – Article 2 – Article 3
What do employers need to do?
Employers should review the links provided above and per the recommendation of our source, Epstein Becker Green, employers should also review their current protocols for internal and external positions, including the relevant factors they rely on for determining compensation.