What New York's New Wage Disclosure Law Could Mean for Employers

What New York's New Wage Disclosure Law Could Mean for Employers

July 27, 2022

Wage transparency is an initiative that has been gaining traction in recent years. Specifically, the push to require private sector employers to disclose a salary or hourly wage range in job postings. The belief is, this levels the playing field for employees before they apply for an open position.

Last month, the New York State Legislature passed a wage transparency law, joining others including California, Connecticut, Washington, Ohio and Nevada.  The law, which awaits Gov. Kathy Hochul’s signature, is a game-changer for private sector employers in the state. It requires employers to disclose compensation, or range of compensation, and the job description, if one exists, when advertising a new employment opportunity, promotion, or transfer. New York City passed a similar law, scheduled to take effect in November.

In outlining the reasoning for the updates to New York’s labor laws, the authors of the bill say:

Because salary decisions are made in the dark, implicit or overt biases continue to shape hiring and salary setting decisions, artificially depressing wages for women and people of color. Meanwhile, lower-wage workers, including those most impacted by the COVID -19 pandemic, lack the information and leverage needed to negotiate fair salaries to escape these discriminatory practices.

Once Gov. Hochul signs the bill into law (which she is widely expected to do), employers found to be in violation of the rules will be subject to fines from the Department of Labor. Additionally, the law includes specific language protecting employees from retaliation for reporting such violations.

We have been receiving inquiries from employers of all sizes across a variety of sectors wondering what their options are. The most common questions/comments (with our advice) are:

How wide of a range can I list for a position?

The short answer is, post an accurate salary range. The language in the bill directs employers to post a salary they believe “in good faith” is accurate at the time of the posting. A good starting point is to look at the current wage rate or salary spend among current employees in similar positions. The bill also requires employers to maintain records of, among other things, the salary history for every position advertised.

How can I post a range when I may offer a different benefits/salary package to an internal employee taking the position versus an external employee who is new to the organization?

It is important to have criteria to decide who is offered what salary in the range. That can be based on experience, unique skillsets, or any other objective factors, so long as they are applied equally to every applicant, be they internal or external.

If I post a position and list a wage range, current employees in that same position are going to demand to have their pay adjusted to the top of the range.

That may be true. There is certainly going to be a period of adjustment if and when the new law takes effect. Employers should be prepared to explain to current employees where they fall into the wage range. Thinking about these issues in advance of posting an open job will help an employer determine an appropriate wage range. If they meet the objective criteria for the top of the range, the employer may need to make the adjustment. If they do not, that should be explained to the employee.

The new law does not take effect until 270 days after Gov. Hochul signs the bill into law, leaving business owners plenty of time to prepare and develop a proactive and successful strategy.  

As always, if you have a question or concern about this, or any New York State employment topic, give myself or a member of our labor and employment practice a call.

Click here to view the current bill.

Mr. Carlin’s practice includes wide ranging federal and state court experience in civil litigation within employment law, environmental defense, class actions, product liability defense, corporate dissolution and shareholder disputes, “business divorce,” breach of contract, OSHA and insurance coverage disputes.
He can be reached at 716-854-4300 ext. 240 or hcarlin@gross-shuman.com