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As the COVID-19 pandemic continues and staffing levels continue to shift, many employers are filling vacancies with new talent, predictably using advertisements to do so. Several months ago, the New York City Council took advantage of this period of increased mobility to pass a bill requiring covered employers to provide compensation information in their job postings. Ambiguities abounded. A new amendment enacted this month, coupled with guidance from the New York City Commission on Human Rights, aims to provide clarity, but some uncertainty remains, particularly for positions involving work at distance. Read on to find out what the amended law requires and how it can significantly impact employers and roles that operate largely outside of city limits.
What does the law generally require?
Designed to combat employee pay secrecy — which has historically led to pay gaps disproportionately affecting women and other marginalized groups — the amended New York City Pay Transparency Act (the “Law”) will require covered employers and employment agencies to include the minimum and maximum annual salary or hourly wage in all advertisements for all covered employment, promotion or transfer opportunities. Covered entities must begin complying with the amended law on November 1, 2022.
Who is an employer covered by the law?
Aside from employment agencies, which are all required to comply, employers must comply with the law if they employ four or more employees, as long as one of those employees works in New York City. For example, if a company headquartered in New Jersey employs 50 people in Jersey City and only two in a small financial district outpost, that company must still comply with the law on its effective date. .
What constitutes “advertising” covered by law and what compensation information should it include?
Although the amended law is silent on the subject, current guidelines from the New York City Commission on Human Rights (CHR) state that a covered “ad” is “a written description” of an opportunity. that is “advertised to a group of potential applicants” through any available mechanism, including internet postings or office bulletin boards, publicly distributed flyers, or official help-seeking announcements in newspapers. However, , the HRC clarified that the law
does not require an employer to use such advertisements to publicize job vacancies. For example, if a manager is simply discussing an internal transfer opportunity with a group of potential candidates, current guidelines suggest that there is no need to provide wage or salary information.
Assuming an employer wants to post a job with a written description, how should they assess the applicable wage or salary range, and what should that range include? Although the amended law requires compensation disclosures to reflect the employer’s assessment of “good faith” at the time of publication, it does not describe what constitutes “good faith” or how “good faith of an employer can be assessed in the event of an alleged violation. The CHR goes a step further – stating that the ranges should be those which cover employers who “honestly believe” they would pay – but provide no concrete mechanism to assess this “honest belief”. In the absence of more specific guidelines, savvy employers would be wise to consider the historical compensation offered to individuals in the position, current market forces, and other relevant factors when setting a compensation range to advertise.
As for the range itself, the amended law specifies that published compensation information must include “annual wage” or “hourly wage”, but does not elaborate on what that wage or salary must include. . The CHR advised that advertised salary and wages do not necessarily have to reflect additional compensation or benefits, such as overtime, bonuses or contributions to a retirement fund, beyond the base salary or salary. .
What positions are covered by law?
In response to the vagueness regarding coverage in the version originally passed, the amended law now clarifies that it does not cover advertisements for positions that “cannot or will not be filled, at least in part, in the city from New York”. With respect to location specifically, the CHR provides that an employer must publish pay scales not only for positions that operate from an office in New York, but also for those that are performed at separate job sites. or an employee’s home within the city limits.
However, neither the law itself nor current CHR guidance sheds light on how a covered employer can predict when a position cannot or will not be filled in New York, and uncertainty remains as to what relates to remote work in particular. Imagine that a covered entity operating primarily in Connecticut secures a client in New York, several months after being posted and hired for a position based in its Hartford office. It remains to be seen whether liability could be incurred under the law if the employee in this role eventually traveled to New York on a periodic basis to serve this new client, but a salary range was not included in her job offer. Likewise, if a company in Pennsylvania offers fully remote positions that can be filled from any location and a remote employee ultimately chooses to work from New York, either at the time of hire or at any time thereafter, it is unclear whether that employer can be held liable for the omission of the required compensation information.
How will the law be enforced against offending employers?
The text of the amended law is much clearer on the issue of enforcement. Only existing employees can sue their current employers for failing to publish required wage or salary information, thereby protecting employers from civil lawsuits by applicants and others who may simply view deficient advertisements. While an offending employer remains subject to civil penalties of up to $250,000 per violation through enforcement by the CHR, the amended law waives the penalty for a first offense if, within 30 days, the employer provides proof that the violation has been corrected. Under CHR guidelines, employers who are deemed to have broken the law may be liable for damages and may be required to update their advertisements and displays in the future, among other remedies.
Given the ambiguity and ongoing concerns regarding remote work, employers are strongly encouraged to contact the authors of this article or any other attorneys in Venable Labor and Employment Group with questions regarding pay transparency requirements.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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