NYC Pay Transparency Law May Result in Pay Compression
Carol Goodman, co-chair of Herrick's Litigation Department and chair of the firm's Employment Practice, and associate Meaghan Roe spoke to SHRM about the New York City Pay Transparency Law that takes effect November 1, 2022. This law amended the New York City Human Rights Law, making it an unlawful discriminatory practice to post any job listing that does not include the minimum and maximum salary or hourly wage offered for the position. Carol and Meaghan share their insights on what this means for employers.
The law "comes as part of a trend to promote wage equity for groups who, historically, received lower compensation—such as women and people of color," stated Carol and Meaghan.
"Under the law, salary includes the base wage or rate of pay, whether measured as a salary or hourly wage," said the team. They added, "This is the information that must be included in an advertisement."
"Salary does not include other forms of compensation or benefits offered in connection with the advertised job, promotion or transfer opportunity," they said. "Thus, an advertisement does not have to include health insurance, time off, severance pay, overtime pay, commissions, tips, bonuses, stock [or] 401(k) plans."
Carol and Meaghan emphasized, "Employers should clarify that the ranges include only base salary and not necessarily total compensation."
They further clarified that an advertisement is a written description of an available job, promotion or transfer opportunity that is publicized to a pool of potential applicants, regardless of the medium. An ad includes internal bulletin boards, Internet advertisements, printed flyers distributed at job fairs and newspaper ads.
"Companies that do not want to post salary ranges at all can hire without using an advertisement as there is no obligation to advertise opportunities, including internal opportunities," Carol and Meaghan highlighted.