This is an important update to the QuickStudy we published on November 9, 2022, shortly after New York City enacted a law requiring the posting of minimum and maximum salary or hour rate range for positions that can be performed, as least in part, in New York City. The Governor of New York just signed on December 21, 2022 a comparable law covering all of New York State. What does this mean for companies that operate on a national basis or are seeking any remote workers in the U.S, in view of this New York State law and the hodgepodge of similar state and local laws that require minimum and maximum salary ranges of job postings and advertisements? Or you may be asking, how do we avoid liability for violating one of these laws? Short answer to both questions: It’s not straightforward. We will try to help you below in determining what you should and should not do under the New York State and New York City pay transparency laws as well as similar laws covering states such as California, Colorado, and Washington State.
After the first week that the New York City law had been in effect, an analysis by Bloomberg News of over 400 salary ranges posted by large employers operating nationwide show minimum salaries for some positions are less than half the maximum salaries for many positions, while other companies have posted minimum salaries at 60-80% of the maximum.
Pay transparency laws are generally intended to address gender and other forms of bias in the pay received by women and minorities.
There are currently pay transparency or disclosure laws in over 20 states and local jurisdictions, with varying requirements. While the jurisdictions noted above have laws that address the content of job postings, many others do not regulate the content of ads and job postings. Some require that companies simply provide salary or hourly pay ranges for open positions to those candidates who ask for such information. Other laws (related to pay transparency but with a slightly different focus) prohibit companies from asking applicants about their current salary or pay rate. Those laws limited to disclosure “on request” or barring “inquiry” about salary history are far easier to comply with than laws that seek to regulate internal and external job postings and advertisements.
The questions created by some of these laws are now coming to light. For example, the original New York City law was amended before it even became effective to clarify the type of job- related information required in advertisements and postings as well as which businesses and positions the law governs. Those amendments have given employers greater clarity about the New York City law, but they also highlight open issues under pay transparency laws from other states and municipalities. Those clarifications to the New York City law were mostly included in the New York State law as well.
The original New York City law expressly stated that it was limited to disclosure of the minimum and maximum “salary” for a position; the amendment clarified the law to require disclosure of the minimum and maximum “annual salary or hourly wage” of the job opening being posted. Neither the original nor the amended law, however, expressly cover commissioned employees (other than any base salary or draw they may receive) or those paid on a piece rate basis. And the law does not cover bonuses, tips, stock options, or benefits, as do some state laws such as Colorado and Washington. The New York State law expressly covers employees paid on a commission basis, but it simply requires “disclosing in writing in a general statement that compensation shall be based on commission.”
Another amendment to the New York City law was an express statement that the law does not apply to “Positions that cannot or will not be performed, at least in part, in the city of New York.” Thus, the law does not appear to regulate a job posting by a nationwide employer with offices in New York City where the job in question is to be performed wholly outside of New York City.
The New York State law is similar, covering all postings for a job, promotion, or transfer opportunity “that can or will be performed, at least in part, in the State of New York.” But what about a job that can be performed remotely by New York City or New York State residents as well as those residing outside the City or State? And what about jobs where the worker must attend a one-day orientation session or quarterly or annual in-person meeting in New York City or New York State? The answer to these and other questions about the jurisdictional reach of other pay transparency laws, including the California law, are also unclear.
Addressing a concern that the New York City law would prompt class actions by any applicant for a position, the amendment expressly states that the only persons who may bring an action for a violation of the law are current employees who sue “their current employer for an alleged violation of this [law] in relation to an advertisement by their employer for a job, promotion or transfer opportunity with such employer.” An applicant can, however, under the New York City law, file a complaint with the New York City Commission. This litigation carve-out for applicants, however, is not a feature of the California or Washington State pay transparency laws; applicants presumably can bring lawsuits under those laws.
In contrast, it appears that there is no private right of action under the New York State law, but any person claiming to be aggrieved by a violation of the law may file a complaint with the Commissioner of Labor. Employers found to be in violation of the new law are subject to fines not to exceed $1,000 for a first violation, $2,000 for a second violation, or $3,000 for a third or subsequent violation. The New York State law does not become effective, however, until the 270th day after enactment (i.e., late September 2023).
In contrast to these relatively reasonable penalties, the New York City law can be very costly for employers that fail to comply with the City law. Penalties can be assessed by the New York City Commission of up to $125,000 for a violation of the law. Penalties are not likely to be so hefty, and the law expressly states there is no fine for a first offense if it has been cured within 30 days of the service of a complaint noting the 30-day cure period. Nonetheless, willful repeat violations can result in a fine of up to $250,000, so compliance is essential.
Colorado permits the filing of complaints with the applicable state agency, with fines ranging from $500 to $10,000. In California, fines for violations of the pay transparency law can be issued by the Labor Commissioner from $100 to $10,000 per violation, but no penalty shall be assessed for a first offense that is cured. In Washington, statutory damages of $5,000 may be awarded by that state’s administrative agency along with a civil penalty of up to $500 for a first offense and $1,000 for repeat violations.
The New York State law includes a requirement that the employer post “the job description” along with the salary or hourly rate range, if a job description exists. It would seem to be unrealistic for employers to include lengthy job descriptions in a job posting; presumably the Commissioner of Labor will issue guidelines indicating that a job description may be short and concise, even if a longer job description exists. Such guidelines hopefully will permit an employer posting a job electronically to include a link to a longer job description.
Although the situation of each employer may warrant differing approaches, here are some steps that a nationwide employer should consider if some or all of its job postings may fall under one of the state or local pay transparency laws:
Those companies that operate only in a single state or city not covered by one of the existing pay transparency laws and do not advertise for remote positions may not need to address the various pay and benefit disclosure issues addressed above. More pay transparency laws will likely be enacted in other states or cities in the coming years, so the above suggestions may be useful to ensure compliance with any new legislation.
 New York Senate Bill 9427 (S. 9427) signed by the Governor on December 21, 2022. The law is to be codified as New York Labor Law section 194-b.
 N.Y.C. Int. No. 134-A (2022), codified at N.Y.C. Admin. Code Sec. 8-107, subdivision 32.
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