Understanding New York’s New Salary Transparency Law

With the aim of promoting fairness in compensation, New York State recently introduced amendments to its Salary Transparency Law. Let’s explore the new law, its implications for employers and employees, and how to find the right executive recruiting agency to help you navigate the new law.

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Background of the New Law

Originally put into effect on December 21, 2022, the Salary Transparency Law was developed to ensure that employers disclose the salary or compensation range when advertising any job, promotion, or transfer opportunity. Any employer with a workforce of four or more was bound by this directive. Violations would result in fines: $1,000 for a first offense, $2,000 for a second, and

$3,000 for further transgressions.

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The New York City salary transparency law heavily influenced the original law. However, two unique elements were added:

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1. Employers were mandated to keep a six-year record of salary ranges.
2. Advertisements were to include a comprehensive job description.

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Significant Amendments

Governor Kathy Hochul, on March 3, 2023, signed legislation that modified the existing Salary Transparency Law in four pivotal ways:

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Application to Remote Workers

Initially, the law focused on jobs executed partially or wholly in New York State, sidelining remote workers. The recent amendments now demand that compensation details be disclosed for jobs done in New York or those done elsewhere if reporting to an office or supervisor within the state.

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Clarity on Commission-based Compensation

If a job offers payment solely on commission, disclosing detailed compensation ranges isn’t mandatory. Instead, employers can state that payment is based on commission. However, if the job offers both a wage and commission, this general statement won’t suffice.

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Recordkeeping Requirement Axed

Previously, employers had to maintain records of job descriptions and compensation ranges. The amendments absolved employers of this responsibility. But it’s crucial to note that existing New York Labor Law  record-keeping commitments still apply.

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Do companies have to advertise job openings?

Companies do not always have to advertise job openings to internal or external candidates, but there are many reasons for them to. The term ‘advertise’ now means sharing a written job description, whether internally or publicly, including electronic modes. This definition aligns with the one in the New York City salary transparency law. Some industries or employers may have their own specific requirements or collective bargaining agreements that could include provisions related to job postings. 

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What the Salary Transparency Law Means for Employers

While the changes offer clarity on certain aspects, ambiguities remain, especially concerning remote jobs. For instance, while the law seems to apply to any job partly done in New York or any role outside the state that reports to a New York-based supervisor, it conflicts with the legislative history. The past documents suggest the amendments were intended primarily for fully remote workers reporting to a New York-based supervisor.

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Without a private right to action, the New York State Department of Labor (NYS DOL) shoulders the responsibility of investigating complaints and assessing penalties. The department’s impending regulations might offer clarity on these gray areas in the future.

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Preparations for Employers

With the Salary Transparency Law coming into effect on September 17, 2023, employers in New York should:

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• Document salary ranges for all positions within New York.
• Conduct a comprehensive pay audit for positions that report to any New York-based entity. If possible, this audit should be conducted under privilege.
• Remain updated with the final guidance from the NYS DOL.

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Benefits of Pay Transparency Fosters Trust within the Organization

When employees are aware of how their pay is determined and believe it is fair and just, it can boost trust in the company’s leadership and policies.

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Bridges the Wage Gap

Transparent pay structures can play a significant role in addressing wage disparities based on gender, ethnicity, or other factors, ensuring equality in compensation.

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Attracts Top Talent

Job seekers often prioritize transparent companies. Being open about compensation can attract skilled professionals seeking transparent work environments.

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Enhances Employee Satisfaction and Retention

When employees feel fairly compensated and are aware of growth and earning opportunities within the company, they are more likely to stay long-term.

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Reduces Salary Negotiation Ambiguities

Transparency minimizes the back-and-forth that often occurs during salary negotiations, streamlining the hiring process.

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Contact JK Exec for Guidance on Pay Transparency

Learning about the intricacies of pay transparency can be challenging. At JK Exec, we specialize in guiding organizations through these nuances. Whether you want to understand the laws better or want to align your company with best practices, our team of experts can assist.

Contact us to request a callback from our team to get help with the new salary transparency law or our recruiting services.

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