The new law requiring employers to include a minimum and maximum potential salary in job advertisements and postings for certain positions in New York City will take effect as amended November 1, 2022.
As summarized in the previous LawFlash, New York City enacted Local Law 32 of 2022 (Salary Disclosure Act), which requires employers to include a good-faith estimate of the minimum and maximum salary expected to be paid in any advertisement for a job, promotion, or transfer opportunities in New York City. A good faith estimate must be made at the time of placing the advertisement; however, it does not require the employer to stay within that range when making the final job offer.
The Salary Disclosure Act was originally set to take effect May 15, 2022. After the Salary Disclosure Act came into effect, both industry and labor advocates lobbied the City Council for amendments that would clarify ambiguities and address other issues. After a meeting of the City Council Committee on Civil and Human Rights, the City Council compromised with stakeholders and reached an agreement on Int. 134-A (Amendment to Legislation), passed by the City Council on April 28, 2022, and signed into law by Mayor Eric Adams on May 12.
In addition to changing the effective date of the Payroll Disclosure Act from May 15 to November 1, the Amendment Act modifies the law in several other important ways.
First, the Salary Disclosure Law will not apply to positions “which cannot or will not be performed, at least in part,” in New York City. Previously, the Salary Disclosure Act did not contain strict jurisdictional limits. Initially, the City Council sought to exclude positions that were “not required to be held, at least in part,” in New York City.
As eventually amended, the language of the Payroll Disclosure Act aligns with the fact sheets issued by the New York City Human Rights Commission (NYCCHR) before the Amendment Act was passed. This fact sheet informs the employer that the Payroll Disclosure Act applies to positions in New York City in the “office, in the field, or away from the employee’s home.” The fact sheet is likely to be amended, however, to reflect the Amendment Act.
Second, the Salary Disclosure Act would also only require disclosure of annual salaries and hourly wages (as opposed to the more common “compensation”). This means that other forms of compensation, such as bonuses, commissions, benefits and long-term incentive opportunities, are not required to be disclosed in job advertisements.
Thirdonly at the moment employees will have the personal right to act under the Salary Disclosure Act with respect to advertisements for jobs, promotions, or transfer opportunities with their current employers. Prospective employees will no have a personal right to act.
Fourth, the covered employer will also not be penalized for any initial violation of the Payroll Disclosure Act, as long as the employer submits evidence that the violation has been resolved within 30 days of the complaint from the NYCCHR. Employers will not, however, have the automatic right to remedy any subsequent alleged infringement to avoid punishment or damages.
Fifth, “general notice that the employer is hiring without reference to a specific position” will not be expressly excluded from coverage. Initially, the City Council attempted to expressly exclude the notice.
The postponement of the effective date of the Salary Disclosure Act is a development welcomed by employers, and the Amendment Act instead clarifies some of the broad initial language of the Salary Disclosure Act. The NYCCHR is expected to issue amended fact sheets and additional guidance closer to the new November 1 effective date.
THE NEXT STEP
Employers should consider taking steps now to comply with the new law as amended, including:
- Reviewing which roles an employer is expected to perform, at least occasionally, from New York City
- Define and document salary ranges for all positions in which the individual currently works in New York City
- Review existing job posting templates or create new templates to use from November 1, 2022 (including internal listings for promotion and transfer opportunities)
- Train supervisors, managers, compliance personnel, human resources, and legal professionals on the implications of the new law—including appropriate communication with applicants and employees
- Consider conducting a payroll equity audit (either for specific positions in New York City or a broader overview of current salaries for departments in New York City) as salary information provided in external job openings will be published on November 1, 2022
- Monitoring for the creation of additional regulations and guidance from the Commission on the implementation of new laws