Hunton Employment & Labor Perspectives

On December 21, 2022, New York Governor Kathy Hochul signed New York State’s pay transparency bill into law.  Effective September 17, 2023, the new law will require employers to disclose the anticipated compensation range for any advertised job posting.  See N.Y. Lab. Law § 194-b.

The law applies to employers located in New York who have four or more employees.  The statute requires these employers to disclose the following information in any advertisement for any “job, promotion, or transfer opportunity” that can or will be performed, at least in part, in the state of New York: (i) the compensation or range of compensation for such job, promotion, or transfer opportunity; and (ii) the job description for such job, promotion, or transfer opportunity, if such description exists.

The statute defines “range of compensation” to mean “the minimum and maximum annual salary or hourly range of compensation  . . . that the employer in good faith believes to be accurate at the time of the posting of an advertisement for such opportunity.”  Id.  For commissions-only positions, the statute provides that a general statement in the advertisement that compensation will be based on commission is sufficient, without the employer needing to provide the actual commission formula in the job posting.

The statute also requires employers to keep and maintain records showing compliance with the statute, including: the history of compensation ranges for each job, promotion, or transfer opportunity and the job descriptions for such positions, if such descriptions exist.  The statute does not state how long employers should keep such records.

Though the New York Department of Labor is expected to issue regulations prior to the effective date, the statute, as currently written, leaves several questions unanswered about how the law will work in practice.  For example:

• The statute does not address how it applies to remote work.  The statute states that the disclosure requirement applies to any position that “can or will be performed, at least in part, in the state of New York.”  This language suggests that the law would likely apply to job advertisements for positions that the employer intends to allow to be performed remotely from any state, including New York, even if the eventual candidate selected for the position is not performing the work from New York. 
• The statute does not provide any details about what it means for a position to be performed “at least in part” in the state of New York.  For example, it is not clear whether periodic travel into New York to perform the position would trigger the statute and, if so, at what threshold.
• It is also not clear if the law applies to “jobs” performed by independent contractors.  New York City’s recently-enacted pay transparency law, for example, expressly states that it applies to “independent contractors.”  The New York state statute does not, but the forthcoming NYDOL guidance will hopefully provide guidance on this issue.
• The statute does not address how employers who post or advertise job openings on non-digital platforms can satisfy the requirement that the written job description be included with the posting or advertisement.  It is not uncommon for a written job description to be multiple pages long and attaching a lengthy job description to what would otherwise be a half-page job advertisement may prove unworkable for physical postings. 

With this law, New York joins a growing number of states and localities with similar laws, including Colorado, California, and New York City.  Employers should continue to watch this space for updated guidance on how this law (and other similar laws) will impact their recruiting practices. More, employers should evaluate the appropriate ranges and documentation related to the same to ensure that such postings are in alignment with the position to be filled and be prepared for potential discourse among incumbents if the range varies from current compensation.