After months of waiting, landmark legislation affecting New York City’s estimated 4 million private sector workers is finally taking effect: Starting November 1, most New York City employers will be required to Indicate the salary range on all job postings, promotions and transfer opportunities.
Experts say legislation that promotes pay transparency on the employer side is key to closing racial and gender pay gaps.
And given the size and scale of employers in New York, coupled with a new adoption of remote working, it’s likely the impact of the new law will go far beyond the city.
Here’s what you need to know.
What the law requires
The law specifically states that beginning November 1, “employers who advertise jobs in New York must include a bona fide salary range for each job, promotion and transfer opportunity advertised.”
A “good faith” range is one that the employer “honestly believes at the time they post the job advertisement that they are prepared to pay the successful candidate(s)”, said the New York City Commission on Human Rights.
Employers must display the minimum and maximum salary offered for a particular position when it is listed on an internal job board, as well as on external sites such as LinkedIn, Glassdoor, Indeed, and other job search platforms . This also applies to any written description of a vacancy that is printed on a flyer, distributed at a job fair or submitted to newspaper classified ads.
The wage requirement is specific to base pay, whether annual or hourly, but does not require employers to list items such as health insurance, vacation, severance pay, overtime, commissions, tips, bonuses, stock, 401(k) matching, or other types of compensation.
Ranges must be specific and cannot be unlimited (eg $15 per hour and up).
Who the law applies to
The law applies to businesses with four or more employees (including the sole proprietor or employer) where at least one person works in New York.
It covers job postings calling for full or part-time employees, interns, domestic workers, independent contractors, or any other class of worker protected by New York City human rights law. .
It covers remote workers in New York, but not companies hiring out of town
Salary must be included in positions for any position 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 means the law applies to out-of-town businesses that want to post jobs for remote work that can be done from anywhere in the United States, including New York.
On the other hand, a New York-based employer won’t have to comply with the law if they advertise work that will specifically be performed at a location outside of the city.
What to expect on November 1
Some large companies began including their pay scales in job postings ahead of the Nov. 1 deadline.
Larger employers likely have better infrastructure and resources to have their salary scales already formalized, and listing them on job postings “will happen more or less overnight,” says Tony Guadagni, senior director of research at the Gartner consulting firm.
Small and medium-sized businesses may take longer to upgrade.
If a company fails to comply with the law, job seekers and workers can file a complaint or leave an anonymous report with the city’s Human Rights Commission, which can open an investigation. People with claims against a current employer can also sue in civil court.
If a company breaks the law, it may have to pay damages to affected employees, update job postings, create or update compensation policies, organize training, and take other forms of redress.
They will, however, get a bit of a grace period – the Commission will not impose a civil penalty for a first complaint as long as the employer shows they have corrected the violation within 30 days. Otherwise, non-compliant companies could face civil penalties of up to $250,000.
How NYC law could affect wages nationwide
Experts agree that it’s only a matter of time before salary transparency laws requiring salary ranges in job postings become the norm in the United States. A similar law already exists in Colorado, and it will reach California and the rest of New York State by next year.
Since many companies are based in or have a presence in New York, some companies may choose to change their policies across the board, even where compliance is not yet required, for consistency.
Although it can be an administrative headache for companies, pay transparency policies are hugely popular among workers. And legal regulation may be what it takes to get corporate executives finally willing to give the public some leverage.
“I think most HR leaders would like to be more transparent about compensation, but struggle to sell it to leaders – the benefits you see with positive employee engagement and results outweigh some of the risks. “says Guadagni.
“HR managers see this as a silver lining. For the first time, their hand is being forced when it comes to pay transparency, and they’re able to get more buy-in from management on things they know how to be positive for the organization as a whole.”
Cold and flu season is here and people are showing up for work sick again
28-year-old ex-teacher now earns $110,000 – how working for a transparent compensation company helped
California job seekers will soon see pay scales on job postings
Register now: Be smarter about your money and your career with our weekly newsletter