New York City Council Delays Effective Date of Salary Disclosure Law, Makes Other Changes
As we have written here and here, the New York City Council passed a salary disclosure law, Int. 134-A, earlier this year with the goal of increasing pay transparency and reducing pay disparities based on gender and race. The law was to come into force this Sunday, May 15.
After publicity and significant pushback from the business community, the city council amended the law to extend the compliance date, clarify some rules, and modify other rules.
Here are the highlights of the changes made by the modifications:
- Compliance deadline extended to November 1. The May 15 compliance deadline has been moved to November 1. Employers will no doubt appreciate the extra time to ensure that their advertised jobs, promotions and transfer opportunities across New York’s five boroughs include required disclosures.
- Definition of “geographic scope”. The amendment clarifies that the salary disclosure requirement will apply to positions that can or will be filled, in whole or in part, in New York City, whether from an office, in the field or remotely from home. This very broad definition encompasses jobs based in New York, fully remote jobs if the remote location is in New York, and “hybrid” jobs in which employees travel to New York a day or two a week from the United States. neighbors. .
- No private right of action for candidates. The original legislation gave applicants and employees the right to sue their employers for violating wage disclosure requirements. With the amendments, candidates no longer have this right, but current employees still have it. In addition, the New York City Commission on Human Rights retains the power to investigate violations and impose fines.
- Possibility of healing the first violations. The amendments offer employers some relief in the form of a “notice and remedy” provision for their first violations. If an employer receives a first complaint from the Commission, the employer will have 30 days from the date the complaint is served to remedy the violation and provide proof of recovery (for example, by submitting a copy of a job posting on LinkedIn indicating that the salary range has been included). If proof of recovery is accepted by the Board, there will be no fine. However, for subsequent violations, the Commission can impose fines of up to $250,000 and impose an injunction, which could include requiring employers to create policies, conduct training, and provide certain notices approved by the Commission. candidates and employees.
- Placement agencies and temporary employment companies. The amendments clarify that the wage disclosure requirement applies to employment agencies and their employees and agents. A temporary help business, however, is still exempt. A temporary help company is defined as “a business that recruits and hires its own employees, and assigns those employees to perform work or services for other organizations, to support or supplement the workforce of another organization, or to provide assistance in special work situations such as, but not limited to, employee absences, skill shortages, seasonal workloads, or to perform special assignments or projects.
The following provisions have not been changed by the Amendments:
- Definition of “salary scale”. The amendments maintain the same definition of the salary range: the minimum and maximum salaries that the employer believes in good faith at the time of the posting that he would pay for the advertised job, promotion or transfer opportunity. The good faith standard gives employers some flexibility in setting the pay scale. The same goes for the rule that good faith belief is at the time of publication– likely allowing employers to offer a salary lower or higher than the posted range when hiring. We expect the Commission to issue regulations providing more guidance on this.
- Hourly workers. The amendments do not change the requirement that employers posting job openings, promotions or transfer opportunities for hourly positions must post salary ranges for those positions. For example, an employer must always advertise that an hourly position will pay $20/hour to $25/hour.
The New York City salary band law bears some similarities to a law enacted in Colorado at the end of 2020. New York City, like Colorado, uses a good faith standard to assess salary bands. But unlike Colorado, New York City does not require salary disclosure to include benefits information.
Recommendations for employers
In light of the changes, we recommend that employers covered by the Wage Scales Act do the following by the new November 1 compliance deadline:
- Determine what the salary ranges will be. Employers will need to determine pay scales for hourly and salaried positions, for potential hires and for current employees, including promotions and transfers. There is a threshold requirement for “advertisement”, which is defined as “a written description of an available job, promotion or transfer opportunity that is advertised to a group of potential applicants”. Employers could consider offering promotion and transfer opportunities on an individual, one-time basis to avoid triggering the wage disclosure law. However, this could give rise to claims of discrimination based on the employer’s failure to make the positions available to all interested candidates.
- Conduct a pay equity audit. A major concern for employers covered by the law will be the reaction of current employees to the disclosure of salary information. As a result, employers no longer have the time to conduct pay equity audits. The audit should be aimed at finding and correcting any pay disparities that may violate the Federal Equal Pay Act, Title VII of the Civil Rights Act of 1964, and the Equal Pay Act of the United States. New York State. The federal EPA applies only to wage discrimination based on sex, but Title VII and New York State law prohibit wage discrimination based on race, sex, national origin, sexual orientation and gender identity (among other categories).
- Establish a complaints process. Talent acquisition specialists, human resources staff, and hiring managers should expect complaints from potential and current employees about the salary ranges provided. Thus, employers should put in place a system to receive, document and deal with these complaints in a consistent way. They should also consider adding the following language to any response to a complaint: “The posted salary range for this position is based on several legitimate, non-discriminatory factors defined by the company. The company is committed to ensuring equal compensation opportunities for equal work, regardless of gender, race, or any other category protected by federal, state, or local pay equity laws.
- Watch for updated guidelines and new regulations. Although the New York City Commission has already issued guidance on the Salary Disclosure Act, be on the lookout for updated guidance from the Commission in light of the amendment. Also be on the lookout for separate Commission regulations.
- Train HR. Employers should train their talent acquisition specialists, HR staff, and hiring managers on wage disclosure law and pay equity in general. Particular attention should be given to setting salaries in a non-discriminatory way and based on quantitative (eg years of experience) and qualitative (eg job performance) parameters. Employers should also include training on other important pay equity laws, including the New York State and New York City wage history laws, which prohibit employers from asking prospective and current employees their salary history.
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