New York State enacts pay transparency legislation

January 17, 2023

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On December 21, 2022, Governor Hochul signed Senate Bill S9427A amending the New York Labor Code to require insured employers to include salary ranges in job postings and advertisements. The state law, scheduled to take effect on September 17, 2023, broadly follows New York’s Pay Transparency Act, which went into effect on November 1, 2022, but has some notable differences.

Insured Employers

The law applies to New York employers with at least four employees, without specifying whether all employees count towards the threshold or only those employed in New York. Significantly, contrary to New York law, are independent contractors Not counted.

Covered Positions

The law applies to jobs that can or will be performed, at least partially, in upstate New York. The law likely covers job postings for remote positions conducted from New York. However, it does not specify how it applies to remote positions that could potentially be held from New York, even if ultimately held from other states.

Employer Obligations

The law requires employers to disclose “compensation ranges” in advertisements and job postings for such positions, including those for new hires and internal promotions. Compensation Range is the lowest and highest annual salary or hourly compensation range that the Employer has a “good faith” belief at the time of notification or publication. In the case of positions on a commission basis, the employer can comply with the disclosure obligation by declaring in writing that remuneration should be on a commission basis.

Unlike city law, state law also requires that covered employers: (1) include the job description in the posting or advertisement, if a job description exists; and (2) maintain a history of compensation ranges and job descriptions, if any, for covered positions. The law does not specify how long employers must keep these records.

The law also specifically prohibits employers from retaliating against applicants or employees for exercising their rights, including filing a complaint with the New York State Department of Labor (NYDOL) about an actual or potential violation of pay transparency requirements.

Enforcement and Penalties

The only enforcement mechanism under state law resides with the NYDOL, which can impose civil penalties for violations of pay transparency requirements. NYDOL penalties are limited to $1,000 for a first violation, $2,000 for a second violation, and $3,000 for subsequent violations. In particular, state law, unlike city law, does not give employers an opportunity to heal first-time infractions before a civil penalty is imposed.

State law does not provide for a private right of action for an infringement. This is in contrast to the city statute, which allows employees (but not job applicants) to file civil lawsuits against employers.

Comply with the patchwork of pay transparency laws

The New York law is part of a recent spate of state and local wage transparency legislation. In addition to states like California and Colorado, places in New York including New York City, Albany County, Westchester County and Ithaca have also introduced wage transparency requirements.

Significantly, state law contains an express provision stating that it shall not supersede or pre-empt any local law, rule or regulation. Therefore, employers in New York City, for example, must comply with both state and city wage transparency requirements. Employers in Westchester County, however, will likely only be covered by state law, as the Westchester Pay Transparency Act states that it is “null and void on the effective date of statewide legislation,” meaning “either the same as or substantially similar to” the local ordinance.

The central theses

State law directs NYDOL to promulgate applicable rules and regulations, so guidance may exist. Until then, covered employers in New York state should take steps to ensure compliance with the new pay transparency requirements beginning in September.

The following Gibson Dunn attorneys helped prepare this client update: Harris Mufson, Danielle Moss, Alex Downie and Michael Wang.

Gibson Dunn’s attorneys are available to assist you with any questions you may have about these developments. To learn more about these issues, please contact the Gibson Dunn attorney with whom you normally work, a member of the Firm’s Labor and Employment Practice, or the following:

Zainab N. Ahmad – New York (+1 212-351-2609, [email protected])

Mylan Denerstein – New York (+1 212-351-3850, [email protected])

Gabrielle Levin – New York (+1 212-351-3901, [email protected])

Danielle J Moss – New York (+1 212-351-6338, [email protected])

Harris M. Mufson – New York (+1 212-351-3805, [email protected])

Jason C. Schwartz – Co-Chairman, Labor & Employment Group, Washington, DC
(+1 202-955-8242, [email protected])

Katherine VA Smith – Co-Chair, Labor & Employment Group, Los Angeles
(+1 213-229-7107, [email protected])

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Attorney Promotion: The attached materials have been prepared for general informational purposes only and are not intended as legal advice.