After months of waiting, landmark legislation affecting New York City’s roughly 4 million private-sector workers is finally going into effect: Starting Nov. 1, most employers in New York City will be required to list the salary range on all posted job ads, promotions and transfer opportunities.
Experts say legislation that promotes salary transparency from the employer’s side is key to closing racial and gender wage gaps.
And given the size and scale of employers in New York City, coupled with a newfound adoption of remote work, it’s likely the new law’s impact will reach far beyond the city.
Here’s what to know.
The law specifically states that beginning Nov. 1, “employers advertising jobs in New York City must include a good faith salary range for every job, promotion, and transfer opportunity advertised.”
A “good faith” range is one the employer “honestly believes at the time they are listing the job advertisement that they are willing to pay the successful applicant(s),” the New York City Commission on Human Rights says.
Employers must post the minimum and maximum salary on offer for a particular role when it’s listed on an internal job board, as well as external sites like LinkedIn, Glassdoor, Indeed and other job search platforms. It also applies to any written description of an open job that’s printed on a flyer, distributed at a job fair or submitted to newspaper classifieds.
The salary requirement is specific to base salary, whether it’s annual or hourly, but doesn’t require employers to list things like health insurance, time off, severance pay, overtime pay, commissions, tips, bonuses, stock, 401(k) matching or other types of compensation.
Ranges must be specific and can’t be open-ended (for example, $15 an hour and up).
The law applies to businesses with four or more employees (including the owner or individual employer) where at least one person is working in New York City.
It covers job ads calling for full- or part-time employees, interns, domestic workers, independent contractors or any other category of worker protected by the New York City Human Rights Law.
Salary must be included on posts for any position that can or will be performed, in whole or in part, in New York City, whether it’s done from an office, in the field or remotely from the employee’s home.
That means the law applies to businesses located out of the city that want to post job ads for remote work that could be done from anywhere in the U.S., including New York City.
On the flip side, a New York City-based employer won’t have to comply with the law if they’re advertising a job that will specifically be done in a location outside the city.
Some major companies began including their pay ranges on job ads prior to the Nov. 1 deadline.
Bigger employers likely have better infrastructure and resources to have their pay ranges already formalized, and listing them on job postings will “happen more or less overnight,” says Tony Guadagni, senior principal of research at consulting firm Gartner.
Small and mid-sized businesses may take longer to get up to speed.
If a company isn’t complying with the law, job seekers and workers can file complaints or leave an anonymous tip with the city’s Commission on Human Rights, which may initiate an investigation. Individuals with claims against a current employer may also file a lawsuit in civil court.
If a business violates the law, they may have to pay monetary damages to affected employees, update their job ads, create or update pay policies, conduct trainings and take other forms of recourse.
They’ll get a little bit of a grace period, though — the Commission won’t assess a civil penalty for a first complaint as long as the employer shows they’ve fixed the violation within 30 days. Otherwise, noncompliant businesses may have to pay civil penalties of up to $250,000.
Experts agree it’s only a matter of time before salary transparency laws requiring salary ranges in job ads become the norm across the U.S. A similar law already exists in Colorado, and it’ll reach California and the rest of New York State by next year.
Because so many companies are based in New York City or have a presence there, some businesses may elect to change their policies across the board, even where compliance isn’t required yet, for the sake of uniformity.
Though it can be an administrative headache for businesses, pay transparency policies are overwhelmingly popular among workers. And legal regulation may be what it takes to get business executives finally onboard with handing some leverage over to the public.
“I think most HR leaders would like to be more transparent about pay, but have a hard time making that case to executives — the benefits you see with positive engagement and employee outcomes outweighs some risks,” Guadagni says.
“HR leaders see this as a silver lining. For the first time, their hand is being forced with regard to pay transparency, and they’re able to get more executive buy-in on things they know to be positive on the organization as a whole.”