Pay Equity, Pay Transparency and Job Postings: What Employers Need to Know Now | Stark & Stark
When it comes to compensation practices, employers are used to being told by federal, state and local lawmakers what to do. DO NOT engage in discriminatory wage practices. Pay overtime when necessary. Pay minimum wage. DO NOT pay under the table. Pay employees equally for equal work. DO NOT ask candidates or employees about their salary history when offering or negotiating a salary. DO NOT ask for a potential employee’s criminal history on a job application. The list continues.
Now, in many states and localities, including New York, employers are being told they must disclose pay ranges in their job postings. The goal of this sweeping pay transparency legislation, which has gained momentum this year and taken hold in the United States, is to promote pay equity by requiring employers to be more publicly transparent about pay. of their employees. At least, in theory, pay transparency should give women and other underpaid and underrepresented workers a better idea of what a position might pay and what to ask for in negotiations. , in hopes of reducing existing pay gaps.
New York City is a recent jurisdiction that has imposed pay transparency requirements. At first glance, employers outside the Big Apple might not think so. ” What is the problem ? they might ask, or “What do I care?” In fact, it could mean a lot. Given: (i) New York City remains the financial epicenter of the world, (ii) the growing wave of remote working, and (iii) many employers are posting job openings on job boards around the world. Nationwide, recent amendments to the New York City Human Rights Act, which went into effect November 1, 2022, may be more relevant, enforceable, and far-reaching than most realize employers.
New York City Human Rights Law considers it an unlawful discriminatory practice to fail to include in job postings the minimum and maximum wage offered for any position located in New York City. By law, covered employers must, in good faith, post the minimum and maximum wage or hourly wage for each advertised job offer, promotion, or transfer opportunity. Some key technical requirements of the law are:
- The salary or wage scale may not be unlimited. The minimum and maximum ends of the range of remuneration must be definitively defined;
- Only base salary (salary or hourly wage) should be included in the job listing – other benefits and employee compensation need not be included;
- Employers are not required to post a pay range where there is no flexibility in the rate of pay (for example, if the wage/salary is fixed and non-negotiable);
- “Good faith” means the range of compensation that the employer sincerely believes it is willing to pay successful applicants; and
- The law’s requirements apply to a range of workers, including full-time and part-time employees, interns and independent contractors.
Obviously, the law applies to employers located in New York or having employees located in New York. The technical requirements listed above, however, do not answer the question of why this new law is relevant to employers located outside of New York City. Here’s why:
- The law applies to all employers (located anywhere) who have at least four employees, as long as one of the employees works in New York – in other words, all four employees do not need to work in the same place where everyone works in New York City;
- Sole proprietors and employers count towards the four employees, as do independent contractors, part-time employees, paid interns and domestic workers.
- While the law exempts from coverage positions that cannot or will not be performed, at least in part, in New York, employers who post a position that “can or will be performed in whole or in part, in New York , whether from an office, in the field or remotely from the employee’s home”, are covered by the law.
Therefore, in certain circumstances, employers nationwide may be required to comply with New York City’s new law. It remains to be seen whether employers can exclude candidates located in New York to avoid being covered by the law (which is specifically prohibited by laws in other states, such as Colorado’s Equal Pay for Employees Act). equal work) but, regardless, excluding New York City candidates is much easier said than done. Indeed, job postings covered by the law include postings on internal bulletin boards, Internet advertisements, printed flyers distributed at job fairs, online job boards and newspaper advertisements. . So any employer using Indeed, Monster, Simply Hired, LinkedIn, or the like, who advertises fully remote or hybrid positions nationwide, is likely required to comply with New York City’s Pay Transparency Law.
Employers, however, might wonder why bother to adjust their job posting practices and procedures to ensure compliance with this new law. New York’s pay transparency law has sharp teeth. While an employer will not face a first complaint penalty if they remedy a violation within 30 days of receiving the notice, employers can be subject to civil penalties of up to $250,000. $ for willful violations of the law.
Employers can take several steps to ensure compliance with these new pay transparency laws, which can strengthen an employer’s compliance with other statutory, public policy and HR concerns, such as compensation practices. disparate under the Equal Pay Act of 1963 (and state analogues). Employers should:
- Review their internal recruiting practices, policies, procedures and models to ensure that all current and future employment offers comply with these laws;
- Review and update, as needed, all job descriptions for their workforce;
- Perform market analysis to ensure that their salary scales are in line with those of their competitors and, if necessary, adjust pay rates so that open positions are competitive;
- Conduct a pay equity audit to correct existing salary imbalances in their workforce; and
- Provide management and human resources training to anyone involved in negotiating compensation for new hires to ensure equal treatment for every candidate and to avoid violating pay transparency and other applicable laws.
This roadmap has several goals, from ensuring compliance with the growing wave of pay transparency laws to avoiding the growing wave of equal pay litigation, while promoting pay equity and maintaining a competitive advantage in the market. Employers who are unsure whether they are governed by pay transparency laws, how to comply with them, or need assistance in adjusting their pay policies, procedures and practices accordingly should consult with their human resources professionals and contact their labor lawyers.