Introduction
As the implementation date for New York’s pay transparency law approaches, the state labor department has issued proposed rules to provide clarity on employers’ wage disclosure obligations. While these regulations are not yet final, it is important to welcome this initial guidance and consider commenting on the proposed regulations before the November 12 deadline. In this article, we will explore the top 10 things you need to know about the proposed rules and their impact on your hiring process.
1. Applicability to Private Employers
The pay transparency law applies to private employers with four or more employees, excluding temporary help firms. It is crucial to note that governmental agencies are exempt from this statute. It is important to assess your organization’s size and determine whether you fall within the scope of this law.
2. Coverage of Jobs Physically Performed in New York
The wage disclosure law applies to job advertisements for positions that will be physically performed in New York. It also covers jobs performed outside of New York but report to a supervisor, office, or other worksite in New York. However, incidental or infrequent presence in the state for work-related purposes does not warrant compliance with the statute.
3. Employer Responsibility for Third-Party Postings
Employers are required to include the salary range in job advertisements, regardless of the medium used for posting. This requirement applies to advertisements posted directly by the employer or through a third-party such as a recruiter or job listing website. Employers must ensure that third parties include the required salary range, but they are not responsible for advertisements that are scraped or automatically aggregated electronically without their knowledge or consent.
4. No Mandatory Requirement to Advertise
The pay transparency statute does not impose an obligation on employers to advertise vacant positions or prescribe the use of specific mediums for posting advertisements. Employers may choose to hire, promote, or transfer employees without posting an advertisement if they prefer.
5. Job Descriptions and Their Role in Wage Disclosure
In addition to the salary range, employers must disclose the job description for the position if one exists. While the proposed regulations do not mandate the maintenance of job descriptions, they specify circumstances where employers are not required to create them. It is advisable to have job descriptions in place, especially when the job title does not adequately convey the duties of the role.
6. Compensation Range and Its Specifications
Employers must disclose the compensation or range of compensation for a job opportunity. The range of compensation must reflect the base pay and cannot be open-ended. Other forms of compensation or benefits, such as health insurance, paid time off, and retirement plans, do not need to be disclosed, though employers can provide additional relevant information. Employers must not conflate these forms of compensation when providing the base pay range.
7. Separate Provision of Extensive Compensation Information
If the range of compensation is too extensive to fit within the space allotted for a job advertisement, employers may provide this information in a separate attachment or addendum. However, it must be easily accessible to prospective applicants and available free of charge. The advertisement should clearly state where the range of compensation information is available.
8. Geographic and Seniority-Based Differentials
The salary range provided in an advertisement must be for a single opportunity at a specific geographic location or region. If an advertisement covers multiple geographic locations or levels of seniority, employers must provide separate compensation ranges for each opportunity. It is essential to accurately delineate compensation differentials based on geography and seniority.
9. Good Faith Range and Adjustments
When disclosing the salary range in a job advertisement, employers must believe in good faith that it is accurate at the time of posting and that they are willing to pay the successful applicant within that range. Employers consider various factors, such as the job market, current employee compensation, hiring budget, and required qualifications. However, employers are not precluded from adjusting the range of compensation during the hiring process based on specific circumstances.
10. Lack of Good Faith and its Implications
Under the proposed regulations, an employer’s actions lack good faith if the disclosed range does not align with what they are willing to pay to successful applicants. Lack of good faith may also be evident if the range of compensation is unreasonably broad without any explanation, preventing applicants from understanding the legitimate range of compensation. Employers should ensure that their disclosed range reflects their true intentions and avoids misrepresentation.
Conclusion
Pay transparency laws are gaining momentum in promoting pay equity, and it is expected that many states and cities will consider implementing them in the coming years. It is essential to stay informed about the developments in the New York State pay transparency law and its implications for your organization. By subscribing to Fisher Phillips’ Insight System, you can receive timely updates and information. If you have any questions or concerns about pay transparency laws or related policies, do not hesitate to reach out to your Fisher Phillips attorney or any attorney in the New York City office.