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May 06, 2022

New York City's Wage Transparency Law to Take Effect November 1, 2022

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On January 15, 2022, the New York City Council enacted Local Law 32 of 2022 (Wage Transparency Law or Law) to amend the New York City Human Rights Law (NYCHRL) to require that most employers include compensation data in their job advertisements. The Law was supposed to take effect on May 15, 2022, however, it faced criticism over a number of ambiguities, including undefined penalties. In response, on April 28, 2022, the New York City Council passed an amendment to the Wage Transparency Law. Among the biggest changes is that employers now have until November 1, 2022—more than six months—to ensure compliance with the Law's requirements. If Mayor Eric Adams signs the Law, which he is expected to do, New York City will become the second jurisdiction in the country (the first being Colorado) to require employers to include minimum and maximum potential salary amounts for open positions in job postings.

IN DEPTH


WHAT THE LAW COVERS

The Wage Transparency Law makes it an "unlawful discriminatory practice" for an employment agency, employer or any employee or agent of any employment agency or employer to advertise a job, promotion or transfer opportunity without stating the minimum and maximum hourly wage or salary compensation in a job advertisement. Employers must list the compensation that it believes in good faith at the time of the posting it would pay for the advertised job, promotion or transfer opportunity. According to the factsheet on the original Law published by the New York City Human Rights Commission (Commission), because the NYCHRL's protections extend to many groups of workers, job postings are covered regardless of whether they are seeking full- or part-time employees, interns, domestic workers, independent contractors or any other category of worker protected by the NYCHRL. The Commission further explains that an "advertisement" is a written description of an available job, promotion or transfer opportunity that is publicized to a pool of potential applicants. Such advertisements are covered regardless of the medium in which they are disseminated. Covered listings include postings on internal bulletin boards, internet advertisements, printed flyers distributed at job fairs and newspaper advertisements.

The Wage Transparency Law applies to all New York City employers with at least four employees. The four employees do not need to work in the same location nor do they all need to work in New York City. As long as one of the employees works in New York City, the workplace is covered.

There are two exemptions to the Wage Transparency Law. First, job advertisements for "temporary employment at temporary help firms" are exempted. The Commission defines temporary help firms as businesses that recruit and hire their own employees and assign those employees to perform work at, or perform services for, other organizations or businesses. Second, employers are exempted from wage disclosure requirements for positions that "cannot and will not be performed, at least in part, in the city of New York."

One key change of the amendment was pushing the effective date of the Law to November 1, 2022. This new date gives employers nearly six additional months to bring their job advertisements into compliance.

FILING A COMPLAINT

Notably, under the Law as amended, only current employees may bring an action against their employer for violation of the Law. Considering the Wage Transparency Law mandates wage disclosure in job advertisements geared toward applicants and not just current employees, this provision appears to prohibit relief for unsuccessful applicants applying for noncompliant positions.

PENALTIES

The civil penalty for an employer's first violation of the Wage Transparency Law is $0 if the employer can show (to the Commission's satisfaction) that it has cured the violation within 30 days of service of the complaint. Submission of proof of a cure can be submitted electronically or in person. If proof of a cure is accepted by the Commission, it is considered "an admission of liability for all purposes." The Wage Transparency Law does not define the meaning of "all purposes," nor does the Law specify fines for subsequent violations.

JOINING A NATIONWIDE MOVEMENT FOR GREATER WAGE TRANSPARENCY

Once the Law goes into effect in November, New York City will join several states and cities that have already passed wage transparency laws in recent years. States and cities have implemented various methods to mandate wage transparency, from banning employers from asking applicants about their salary history to requiring employers to disclose the pay range for a job if an applicant asks for it during the application process (i.e., after an initial interview, only when the employee asks for it). New York City's Wage Transparency Law, however, requires employers to list the minimum and maximum salary for all job postings, promotions or transfer opportunities.

WHAT THIS MEANS FOR EMPLOYERS

With the amendment, employers now have another six months to ensure their job advertisements are compliant. Given the Wage Transparency Law's good faith requirement, employers should start preparing now by gathering documentation about each job position and determining wage ranges using existing data. If no such data exists, employers should create benchmark data to identify a wage range for each position. Employers can use the Commission's factsheet for guidance, although they should expect the Commission to publish additional guidance before the Law takes effect.

ALM expressly disclaims any express or implied warranty regarding the OnPractice Content, including any implied warranty that the OnPractice Content is accurate, has been corrected or is otherwise free from errors.

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