By Anastasia M. McCarthy, Esq.
Earlier this month, the New York Pay Transparency Act went into effect.
What does this mean for New York businesses?
If you own or run a business with four or more employees in the State of New York, you must include a compensation range for all job openings, promotions, and transfers. The range, whether pertaining to salaried or hourly employees, must include the minimum and maximum compensation that may, in good faith, be expected at the time of posting. If the position is commission-based, that information must also be set forth in the posting.
The law also expressly prohibits retaliation against employees who discuss their compensation with coworkers.
According to proposed regulations (which remain open for public comment until Nov. 13, 2023):
- The Range of Compensation means the base rate of pay, regardless of the frequency of payment;
- The Range must reflect the expected compensation for a single opportunity and a single geographic location or region—if the opportunity encompasses multiple geographic locations, or multiple levels of seniority or supervisory authority, then multiple ranges must be provided for each opportunity.
- The Range cannot be open-ended—it must include a minimum and maximum dollar amount the employer, in good faith, is willing to pay for each opportunity. An opportunity may not be advertised as something like—“$20 per hour and up.”
- Similarly, a range that is too broad will be viewed as evidence of “bad faith” unless the employer provides a reasonable explanation for a broad range. Ultimately, the applicant must be able to glean the legitimate range of compensation the employer is willing to pay for the opportunity advertised.
- The Range of Compensation need not include other forms of compensation or benefits such as health, life, or other employer-provided insurance, paid or unpaid time off, severance pay, overtime pay, or other forms of compensation like commissions (although you must state whether an opportunity is commission-based) tips, bonuses, stocks, or the value of employer provided meals or lodging.
- If compensation includes tips, you may state something like—“the base rate of pay is $20 per hour with an estimated additional $10 per hour in tips.” Employers cannot include the anticipated tips in the hourly wage, however, because it fails to disclose the base rate of pay—for example, you may not say the range is $30 per hour or $30 per hour including tips.
- The law does not require that employers post every available job, promotion, or transfer opportunity nor does it require that employers use any particular advertising medium.
Any person “claiming to be aggrieved by a violation” of the law may file a Complaint.
Public comment on the proposed regulations will be accepted for a 60-day period until November 13, 2023. To submit a comment, you may send an email to [email protected].
