Even somebody living under a rock for the last few months can’t have missed the pay transparency one gathering momentum as it sped toward business reality in New York City. As of today, November 1, 2022, most employers in the big city are mandated to publish their salary-range lists on all posted job ads.
For full transparency on this news (of course), here’s a direct quote from the new law:
“…employers advertising jobs in New York City must include a good faith salary range for every job, promotion, and transfer opportunity advertised.”
It isn’t hard to imagine some sharp-eyed people focusing in on the term “good faith”, but that’s duly covered by the New York City Commision on Human Rights. The phrase is to be interpreted as a salary-range that the employer “honesty believes at the time they are listing the job advertisement that they are willing to pay the successful applicant(s).”
Anybody want to use that as a loophole? We’d advise against.
Who the New Law Applies to
Any business with four or more employees, including the owner or individual employer, in which at least one person works in New York City. This incorporates full- or part-time employees, interns, domestic workers, independent contractors or any other category of worker under the protection of the New York City Human Rights Law.
Getting down to it, salary range must be included for any position to be performed, in whole or in part, in New York City, whether that work is performed from an office setting, in the field, or from an employee’s home.
NOTE: This will include businesses that exist outside of New York City posting job ads for remote work that can be performed anywhere in the US, which would include, of course, New York City. Conversely, an employer based in New York City will be exempt from the law if advertising a job that will be performed outside of the city.
How the New Law Breaks Down
The requirement for affected employers is that they post the minimum and maximum salary for any role when listed on internal job boards or external sites like LinkedIn, Glassdoor, Ladders, Indeed or other job search platforms. Further, the law includes any written description of an open role that is printed on a flyer, distributed at a job fair, or used in newspaper classifieds.
Basically, if you’re advertising a job, you are publishing the salary range you are prepared to pay for that position. And, as stated, the range must be complete, not open-ended.
What the New Law Excludes
The new law is specific to base salary (annual or hourly), so it does not require the listing of elements like overtime pay, commissions, bonuses, tips, stock, 401(k) matching, health insurance, time off, severance pay or other types of compensation.
Listing any of those elements is a matter of the employer’s discretion, and something that should be considered from a competitive standpoint. (More later.)
The “Salary Expectations” Question
Asking potential employees about their current or past salaries has been a definite no-no since Labor Law Section 194-a became effective on January 6, 2020. Current or past salary isn’t to be talked about, either directly or indirectly, and certainly not put in writing anywhere.
However, this does not prevent employers asking about a potential employees salary expectations. The question for today, then, is simple: “Is this question now defunct?” In other words, if a candidate responds to a job post with a definite salary range, the question only really covers what place in that range would be acceptable, based on qualifications, experience, and so on.
If the question is still to be asked, orally or in writing, the new law creates a water-tight context for the question.
“Given the salary range offered for this position, what specific salary would you expect?”
What Happens Now?
Some companies are ahead of the game and have been including their salary-ranges prior to the law taking effect November 1. Of course, these are likely companies with the resources to solidify these ranges and channel them through their systems ahead of time. For other companies, this is not so simple – legal deadline or not.
Job seekers and workers have the right post-deadline to file complaints against non-compliant companies, including anonymous tips to NYC’s Commission on Human Rights, who then have the right to initiate an investigation. Individuals who feel they have a claim against a current employer are free to file a lawsuit in civil court.
The end result can be monetary damages paid by companies to wronged individuals and all kinds of jumping through potentially expensive hoops to update the areas in which they are judged to be lacking.
GOOD NEWS? There is a grace period. A first complaint will not result in a civil penalty as long as the employer can show they have corrected the violation within 30 days. Beyond that, “noncompliant” businesses could pay civil penalties up to $250,000 a pop.
Where Else Is This Happening?
A pay-range law currently exists in Colorado and should be in place in the rest of New York State and in California by the end of the year. Most experts are in agreement that pay-range laws will become the norm across the US at some point in the near future, driven by the sheer popularity of the laws among workers and despite the administrative headaches caused to many businesses.
What About Competition?
If your pay-range isn’t particularly competitive, you should look into areas you can choose to highlight in your job posts. Let’s say a competitor has a better pay-range beyond the budget you have available, but the competitor is advertising for an in-office position, whereas you are open to a remote option. That’s to your advantage.
In a survey conducted in July 2022 by economists Jose Maria Barrero, Nicholas Bloom, Steven J. Davis, Brent H. Meyer, and Emil Mihaylov, it was found that 38 percent of companies surveyed (over 500), said they expanded remote work opportunities over the past year “to keep employees happy and to moderate wage-growth pressures.” And a similar percentage stated that they intend to follow this example.
Another method of competition is to highlight all your compensations and benefits that could be of great value to talent, then target the best fit candidates aggressively. One way to do this successfully is to take advantage of Promoted Job Posts from Ladders Hiring Teams, keeping you at the top of search results for highly targeted professionals and essentially starting out with a qualified candidate pool, rather than attempting to build one.
As with anything else, it’s up to businesses to embrace the changes, find ways to make them work, and come out ahead.
So let’s do that, then.