New York Transparency Laws: An Overview
Put in the simplest terms, New York Transparency Laws can be divided into two main categories: (1) wage transparency and (2) salary history restrictions. Each is briefly discussed below.
Wage Transparency Requirements
On September 17, 2023, New York joined a growing number of states in enacting Pay Transparency Laws. In general, New York law requires that covered employers disclose salary ranges in job postings and advertisements.
More specifically, under New York law any employer with 4 or more employees that advertises a job, promotion, or transfer opportunity that will physically be performed, at least in part, in New York must disclose the following information: (1) the compensation or range of compensation, i.e., the minimum and maximum annual salary or hourly range of compensation; and (2) the job description, if any, for the advertised job, promotion, or transfer opportunity. Importantly, and largely as a result of the post-COVID-19 remote workplace, New York law also applies to those advertisements that will be physically performed outside of New York, but that will report to a supervisor, office, or other worksite in New York. Put simply, New York Transparency Laws have extraterritorial implications. Further, for commission-based positions, employers may satisfy the disclosure requirement by stating in writing that the compensation will be based on commission.
As any labor and employment practitioner should expect, New York law also contains an anti-retaliation provision within its Pay Transparency Laws. Indeed, employers cannot refuse to interview, hire, promote, employ, or otherwise retaliate against either an applicant (for new positions) or a current employee (for promotion or transfer opportunities) for exercising their rights under the Pay Transparency Laws.
Salary History Restrictions
A second, though related, component of New York Pay Transparency Laws relates to whether employers may rely on salary history in determining the compensation of applicants or employees.
Under New York law, employers with 1 or more employees are prohibited from (1) relying on the wage or salary history of an applicant in determining whether to offer employment to the applicant or in determining the applicant’s wages or salary; (2) requesting (orally or in writing) or requiring the wage or salary history of an applicant or current employee as a condition of being interviewed or considered for promotion; and (3) refusing to interview, hire, promote, or otherwise employ an applicant or current employee for failure to disclose their wage or salary history.
The law carves out a few significant exceptions, however. First, an employer may confirm the wage or salary history the individual in response to an offer of employment. Second, an employer may ask an applicant for their salary expectations for the position, provided that the employer does not ask what the applicant previously earned. Third, if the individual voluntarily and without prompting discloses their salary history, an employer may consider and verify the individual’s wage or salary history and rely on information about the individual’s salary history in determining what to offer in salary, benefits, or other compensation However, New York law prohibits an employer from relying on an individual’s prior salary to justify any disparities in pay that would otherwise violate applicable law.
Local Pay Transparency Laws
It is also important to be aware of city- or locality-specific requirements that may impact an employer’s rights or responsibilities when operating within specific municipalities. For example, New York City, Ithaca, Westchester County, Albany County, and Suffolk County have promulgated salary history bans and employers operating within those jurisdictions should be mindful of additional legal obligations.
Transparency Laws in Other Jurisdictions
As mentioned above, New York is only one of many states that have actively taken steps in enacting Pay Transparency Laws. For example, the following states or districts have similarly enacted both wage transparency and salary history restrictions: California, Colorado, Connecticut, Washington, D.C., Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Nevada, Rhode Island, Vermont and Washington. In addition, the following states have enacted only salary history restrictions: Alabama, Delaware, Maine, New Jersey and Oregon.
As with New York, many local jurisdictions within these states—such as San Francisco—have enacted specific requirements.
Conclusion
Many states have now enacted Pay Transparency Laws—though at various degrees of compliance and requirements. The push for equitable and transparent compensation practice is expected to continue throughout the nation, as more states and municipalities introduce new legislation or expand upon previously enacted legislation. Thus, multi-state employers, or employers with remote employees in various states, should continue to be mindful of this developing area of the law. One thing is certain: we are in a new era of pay transparency and these laws are here to stay. •
