On March 22, 2022, the New York City Commission on Human Rights (the “Commission”) issued its first round of guidance regarding the salary transparency law (the “Salary Transparency Law” or “STL”) currently scheduled to take effect on May 15, 2022. As we previously reported, the Law will amend the New York City Human Rights Law (“NYCHRL”) to require all New York City employers to state the minimum and maximum salary associated with an advertised internal or external “job, promotion, or transfer opportunity.”
While the Salary Transparency Law itself is brief and leaves many questions unanswered, the Commission’s guidance (the “Guidance”) provides some level of clarity and compliance information. Importantly, the Guidance specifies the scope of the Salary Transparency Law’s coverage. According to the Guidance, the STL will apply to all employers with four or more employees so long as at least one of those employees works in New York City. The STL also applies with equal force to New York City employment agencies. Temporary help firms are excluded from the STL’s coverage, but employers who work with such firms still must comply with the law’s requirements.
The Guidance specifies that covered employers must comply with the Salary Transparency Law when advertising for positions “that can or will be performed, in whole or in part, in New York City, whether from an office, in the field, or remotely from the employee’s home.” (emphasis added). Stated another way, a covered employer’s advertisements for fully remote positions appear to be subject to the STL’s requirements. Advertisements for full-time employees, part-time employees, interns, domestic workers, independent contractors, or any other category of worker protected by the NYCHRL must comply with the STL, but the Guidance is clear that covered employers will not be penalized if they choose to hire for a position without advertising it.
The Guidance also provides further detail regarding the salary range that must be included in an STL-compliant advertisement. Under the STL, a covered employer must state “the minimum and maximum salary they in good faith believe at the time of the posting they are willing to pay for the advertised job, promotion, or transfer opportunity.” The Guidance describes that a salary range is set in “good faith” if an employer “honestly believes at the time they are listing the job advertisement that they are willing to pay the successful applicant” the listed salary range. The Guidance also prohibits open-ended salary ranges (i.e., “$15 per hour and up” or “maximum of $50,000 per year”), and specifies that a range should contain identical numbers if the rate of pay is inflexible (i.e., “$20 per hour – $20 per hour”). The term “salary” as used in the STL means “the base wage or rate of pay,” and may be hourly, annual, or some other frequency of payment. However, the Guidance clarifies that the term “salary” does not include: (i) health, life, or other employer-provided insurance; (ii) paid or unpaid time off work, such as paid sick or vacation days, leaves of absence, or sabbaticals; (iii) the availability of or contributions towards retirement or savings funds; (iv) severance pay; (v) overtime pay; or (vi) other forms of compensation, such as commissions, tips, bonuses, stock, or the value of employer-provided meals or lodging.
Finally, the Guidance describes penalties associated with employer non-compliance, which include up to $250,000 in civil fines and the full range of compensatory damages, punitive damages, and attorneys’ fees available under the NYCHRL. The Guidance also appears to indicate that more requirements may be forthcoming, including training and employee notice requirements.
The Guidance anticipates a May 15, 2022 effective date for the Salary Transparency Law. However, as we have also previously reported, an amendment that is currently pending before the New York City Council (the “Council”) may change the effective date to November 1, 2022. The same amendment would also contravene the Guidance by exempting advertisements for positions that are not required to be performed in New York City, including fully remote positions. That amendment proceeded to a hearing on April 5, 2022, but has yet to pass.
We will continue to monitor any new developments and provide updates as they become available.