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On November 1, 2022, the New York City pay transparency law took effect, requiring most New York City employers to disclose salary ranges on job listings. This law, and many others like it that have recently passed in several states across the country, is a major milestone for employee rights, as it is long overdue that companies practice transparency regarding pay.

The basic facts

According to the NYC Commission on Human Rights, covered employers are required to disclose the minimum and maximum annual salary they in good faith believe would be paid for the position. “Covered employers” can be defined as employers who have four or more employees (independent contractors and owners included), or one or more domestic workers, as long as one or more of the employees works in New York City. The law extends to employment agencies of all sizes, while listings for temporary employment from temporary staffing firms are exempt from the disclosure requirements. The term “salary” encompasses “base annual or hourly wage or rate of pay,” which does not extend to additional forms of compensation such as overtime pay, severance pay, health insurance, commissions, tips and stock.

Implementation of the law was met with immediate resistance

Indeed, the pay transparency law did not have a smooth launch, with many New Yorkers calling out companies for posting extremely broad ranges, i.e. $50,000 to $145,000 for a reporter opening, $125,800 to $211,300 for a senior technical writer, $106,000 to $241,000 for a general counsel position.

In the most egregious case, according to Gotham, Citigroup listed several jobs with a range of $0 to $2 million. Claiming this was caused by a computer glitch, Citigroup updated its ranges; however, a listing reported after this alleged mistake still displayed a range of $61,710 and $155,290 (it has since been taken down).

How companies will try to work around the law

The unfortunate truth is that businesses will likely find other ways around transparency, such as ceasing advertising altogether and only relying on other means of recruiting and hiring. According to The Wall Street Journal, some companies may take down job postings and instead encourage applicants to submit their resume to a general email address. Employers may also avoid complying with the new law by hiring remote workers and claiming the job cannot be done from NYC.

To combat this, job seekers and workers may file complaints or leave anonymous tips with the NYC Commission on Human Rights. Companies will be given 30 days to ameliorate the violation, otherwise they may face civil penalties of up to $250,000.

What companies trying to find their way around this law are failing to realize is the mutual benefit pay transparency can have for both employers and employees alike. Indeed, more than half of job seekers say that if a company does not list its pay, they will not apply for the job. Furthermore, many women in leadership roles who feel they are not being paid equitably tend to leave in order to pursue a position where their salary aligns with their credentials. Thus, disclosing pay could actually be beneficial for both recruitment and retaining high caliber employees.

Pay transparency could have major benefits for Womens’ Rights

One of the main goals of this pay transparency law is to close the glaring gender wage gap that has existed for decades–a gap that is even more glaring for women of color. According to a 2017 Pew Research Center survey, a quarter of employed women reported earning less than a man doing the same job, while only 5 percent of employed men reported earning less than a woman doing the same job.

This wage gap is in part due to bias from those hiring, however it can also be attributed to the lack of pay transparency. Research shows that women engage in salary negotiation less often than men when applying for jobs that do not explicitly state that wages are negotiable. This lack of negotiation is not due to fear of qualification for the job, but rather a worry that they may be penalized for wanting “too much.” This concern is even more apparent for Black women, who have faced systemic pushback when asking for high salaries.

Thus, with pay transparency on the table, significant strides will be made in closing the gender pay gap. At long last, women will be able to seek positions that truly meet their qualifications and be properly compensated for their hard work.

Call Us

At Filippatos PLLC we are committed to ensuring equal pay for women and minorities in the workplace. If you believe that your employer is not practicing equality-based compensation, or is violating the NYC Pay Transparency Law, please give us a call at 888-9-JOBLAW for a free consultation.

 

Sources

Liu, Jennifer. n.d. “$2 Million Ranges, Deleted Job Posts: NYC’s Salary  Transparency Law Is off to a Rocky Start.” CNBC. Accessed November 10, 2022. https://www.cnbc.com/2022/11/03/nycs-new-salary-transparency-law-is-off-to-a-rocky-start.html.

“Why the NYC Pay Transparency Law Could Be a Game-Changer for Women Everywhere.” n.d. MSNBC.com. Accessed November 10, 2022. https://www.msnbc.com/know-your-value/career-growth/why-nyc-pay-transparency-law-could-be-game-changer-women-n1300566.

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