HR Alert: NY Pay Transparency Effective September 2023

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Recently, Governor Hochul signed into law the pay transparency bill, now known as Labor Law § 194-b, which takes effect on September 17, 2023.

To whom does this law apply?  The law applies to any person or company that employs four or more employees as well headhunters, hiring agencies and recruiters.

What does this law require from employers and hiring agencies?  Any advertisement for a job must include a job description together with either the exact compensation or a range of compensation.

The range of compensation should be the minimum and maximum salary or hourly pay for the position. Employers must act in good faith, and the range should be accurate for the position. This means employers or hiring agents can’t list a very low minimum and/or very high maximum and delay their ultimate decision until later. Rather, they have to show their good faith by providing an accurate compensation range.

The law also requires the inclusion of a job description for the position. While the plain language of the law doesn’t require employers to create job descriptions, if one exists, it’s supposed to be included.

These two pieces of information are necessary for any job, promotion, or transfer opportunity, meaning this law applies to both internal and external hiring.

Under the law, employers are required to keep records to demonstrate their compliance. These records include the compensation history and any existing job descriptions for each job, promotion, or transfer opportunity. Moreover, employers can’t refuse to interview, hire, promote, or employ, nor can they retaliate against, an applicant or current employee for requesting this information.

Are there teeth to the law?  Yes. While there’s no private right of action under the law, anyone can file a complaint with the New York Department of Labor if they think an ad violates the new law.  If the DOL concludes that there was a violation, the employer can be fined.

Notably, a similar law went into effect in New York City on November 1, 2022.  Although the laws are similar, the State law has two requirements that the City law doesn’t.  The State law requires (1) the inclusion of job descriptions and (2) keeping a record of the ads so that employers can demonstrate their compliance with the law. And the State law is clear that it doesn’t supersede or preempt any local rules or regulations.

What should employers do now?  As a reminder, the law will take effect on September 17, 2023, but it’s a best practice to begin preparing now.

First, it’s a good idea to ensure that your current employees are adequately compensated for their positions, because they’re going to start seeing these ads, too. It shouldn’t come as a surprise if your current workforce becomes upset upon seeing their job advertised for significantly higher compensation.  As a risk mitigation strategy, then, work on taking steps now to ensure your current employees are equitably compensated.

The law also requires that employers keep a record of compensation history for each job, promotion, and transfer opportunity. Now’s the time to begin compiling this list. Along with compensation ranges, employers should maintain a running list of job descriptions for each position. Having job descriptions for each position within the company will make it clear what’s expected from each employee which should justify why positions are compensated differently.  Compiling a list of compensation ranges and job descriptions should facilitate a smooth transition as we approach the September effective date.

The law also requires the Commissioner of Labor to promulgate regulations intended to enforce this law. We’ll be looking out for any rulemaking from the DOL in the coming months and will be sure to keep you informed on any updates.

If you have questions about this or other employment laws, don’t hesitate to reach out. The Coppola Firm can help answer questions and assist in creating an efficient and compliant approach to New York employment law.

Give us a call at 716-839-9700!

Lisa Coppola

Written by Lisa Coppola

Founder of The Coppola Firm

Lisa A. Coppola, Esq. understands the challenges her clients face, whether they’re starting a new business, taking their existing operations in a new direction, or facing a claim or threat.

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