New York City Commission on Human Rights Provides Salary Range Transparency Act Guidance
The New York City Commission on Human Rights has released a Fact Sheet entitled Salary Transparency in Job Advertisements, which provides much-welcomed guidance to employers on the NYC Salary Range Transparency Act. Some questions, however, remain unanswered.
As we reported in our initial post, the Act amends the New York City Human Rights Law to make it an unlawful discriminatory practice for an employer to “advertise a job promotion or transfer opportunity without stating the minimum and maximum salary for such position in such advertisement.” The law does not provide guidance for this obligation other than stating that the salary “range may extend from the lowest to the highest salary the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion or transfer opportunity.” With little else to go on, employers anticipated additional interpretative guidance, which the Commission has now provided.
In its guidance, the Commission defines an “advertisement” as a “written description of an available job, promotion, or transfer opportunity that is publicized to a pool of potential applicants.” Covered advertisements include, without limitation, postings on “internal bulletin boards, internet advertisements, printed flyers distributed at job fairs, and newspaper advertisements.” The keys here are that advertisements are both written and publicized to an applicant pool. Nothing in the guidance or the law itself prevents an employer from hiring without advertising the role. It appears, therefore, that private, confidential searches (including those sourced through a recruiter) may not be subject to the law.
Critically, the guidance notes that the law applies to positions for any type of work 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.” This important clarification confirms that the law extends only to those positions where the employer would hire someone to perform the role in New York City. Therefore, even if an employer is physically located within New York City, if the role it is seeking to fill will not be performed from New York City (whether in a NYC home or an employee’s NYC home office), then salary range information need not be posted for employment positions performed outside NYC.
The next part of the guidance addressed how employers must satisfy the salary range information requirement. The Commission noted that “salary” includes “the base wage or rate of pay, regardless of the frequency of payment,” but does not include “other forms of compensation or benefits offered in connection with the advertised job,” including, health insurance benefits, PTO, 401K contributions, severance pay, overtime pay, or other forms of compensation such as commissions, bonuses, tips or equity. While employers may include information about such benefits and other forms of compensation, the Commission confirmed that the law does not require employers to post this information.
The Commission also defined a “good faith” minimum and maximum salary range as “the salary range the employer honestly believes at the time they are listing the job advertisement that they are willing to pay the successful applicant(s).” But a salary range may not be open-ended.
Finally, the Commission clarified enforcement of this law. Violations may be investigated by the Commission upon the filing of a complaint, as well as by law enforcement, based on testing, tips, and other sources of information. A civil penalty of up to $250,000 may result. A violation may also result in the award of compensatory and punitive damages and attorney’s fees and costs in connection with an individual’s private right of action.
Potential Amendment to the Law
In addition to the Commission’s guidance, the New York City Council also recently proposed an amendment to this law, which, among other items, seeks to (i) postpone the effective date from May 15, 2022 to November 1, 2022, (ii) extend the law only to those employers with 15 or more workers, (iii) confirm that the law requires disclosure of the role’s hourly rate in lieu of a salary; and (iv) confirm that the law would not extend to roles “not required to be performed, at least in part, in the city of New York.” The proposed law was put over in committee recently, so for now, employers should prepare to comply by the existing May 15, 2022 deadline.
Parting Thoughts and Next Steps for Employers
Employers should be actively working with those responsible at their business for generating and posting their job advertisements to ensure compliance with the law. In doing so:
Employers operating in jurisdictions outside of New York City should take note of whether other similar state laws apply (or may eventually apply – e.g., in California, which is considering its own pay transparency amendments). For example, Colorado’s law requires employer to provide more information, including a general description of any bonuses, commissions or other compensation and of the benefits the employer is offering. Employers who are willing to fill a role with someone working in New York City or Colorado, for example, should be mindful of fashioning their job descriptions accordingly.
Employers should consider whether they should, as a best practice, update their postings more generally, no matter the role or location (including for existing postings), to include this information (and other compensation information) in order to be competitive and ease the potential administrative burden of parsing among various locations where employees are assigned (or choose) to work.
Likewise, in posting this information, employers should consult with counsel to ensure they are in compliance with applicable related equal pay laws.