As the COVID-19 pandemic continues and staffing levels remain in flux, many employers are filling open positions with new talent, predictably using advertisements to do so. Several months ago, the New York City Council seized on this period of increased mobility, passing a bill to compel covered employers to provide compensation information in their advertisements for job openings. Ambiguities abounded. A new amendment enacted this month—coupled with guidance from the New York City Commission on Human Rights—aim to provide clarity, but some uncertainty persists, especially for positions involving remote work. Read on for what the amended law requires, and how it may have a wide-reaching impact on employers and roles that operate largely outside City limits.
What does the Law require generally?
Designed to address secrecy regarding employee salaries—which has historically led to wage gaps disproportionately affecting women and other marginalized groups—the amended version of New York City's Wage Transparency Law (the "Law") will require covered employers and employment agencies to include the minimum and maximum annual salary or hourly wage in all advertisements for all covered job, promotion, or transfer opportunities. Covered entities must begin complying with the amended Law on November 1, 2022.
Who is a covered employer under the Law?
Setting aside employment agencies—all of which are required to comply—employers must follow the Law if they employ four or more employees, as long as one of those employees works within New York City. For example, if a company headquartered in New Jersey employs 50 people in Jersey City and only two in a small outpost in the Financial District, that company must nevertheless comply with the Law on its effective date.
What constitutes a covered "advertisement" under the Law, and what compensation information must it include?
Although the amended Law is silent on the subject, current guidance from the New York City Commission on Human Rights (CHR) indicates that a covered "advertisement" is "a written description" of a job opportunity that is "publicized to a pool of potential applicants" via any available mechanism, including postings on the internet or office bulletin boards, flyers distributed publicly, or formal newspaper help-wanted ads. However, the CHR has clarified that the Law does not require an employer to use such advertisements to publicize job openings. For example, if a manager simply discusses an internal transfer opportunity with a group of potential candidates, current guidance suggests that salary or wage information need not be provided.
Assuming that an employer wishes to advertise a job opening with a written description, how should it assess the applicable salary or wage range, and what must that range include? While the amended Law mandates that the compensation information reflect the employer's "good faith" assessment at the time of the publication, it does not describe what constitutes "good faith" or how an employer's "good faith" may be evaluated in the event of a claimed violation. The CHR goes a step further—stating that the ranges must be those that covered employers "honestly believe" that they would pay—but provides no concrete mechanism for assessing that "honest belief." In the absence of more specific guidance, savvy employers would be wise to consider the historical compensation provided to individuals in the position, current market forces, and other relevant factors when settling on a compensation range to advertise.
With regard to the range itself, the amended Law clarifies that the published compensation information must include the "annual salary" or "hourly wage," but does not offer details as to what that salary or wage must include. The CHR has indicated that the advertised salary and wage need not reflect any additional compensation or benefits—such as overtime, bonuses, or any retirement fund contributions—beyond the base salary or wage.
What positions are covered under the Law?
In response to vagueness regarding coverage in the version originally passed, the amended Law now specifies that it does not cover advertisements for those positions that "cannot or will not be performed, at least in part, in the city of New York." Regarding location specifically, the CHR provides that an employer must publish salary ranges not only for those positions that operate out of an office in New York City, but also for those that are performed at separate job sites or an employee's home within City limits.
However, neither the Law itself nor the current CHR guidance sheds any light on how a covered employer may predict when a position cannot or will not be performed within New York City, and uncertainty persists respecting remote work in particular. Imagine that a covered entity operating primarily in Connecticut secures a client in New York City, several months after posting and hiring for a role that is based in its Hartford office. It remains to be seen whether liability could attach under the Law if the employee in that role ultimately travels to New York City on a periodic basis to service this new client, but a salary range was not included in her job posting. Similarly, if a Pennsylvania company offers fully remote positions that can be performed from any locale, and a remote employee ultimately elects to work from New York City—whether at the time of hiring, or at any point thereafter—it is unclear whether that employer may be liable for omitting the requisite compensation information.
How will the Law be enforced against offending employers?
The text of the amended Law is far clearer on the issue of enforcement. Only existing employees may bring a claim against their current employers for a failure to publish the requisite salary or wage information, thereby insulating employers from civil lawsuits initiated by applicants and others who may simply view the deficient advertisements. While an offending employer remains subject to civil penalties up to $250,000 per violation via enforcement by the CHR, the amended Law waives the penalty for a first offense if, within 30 days, the employer provides proof that the violation has been cured. Per CHR guidance, employers that are deemed to have violated the Law may be on the hook for damages and may be required to update their advertisements and postings going forward, among other remedies.
Given continued ambiguity and concerns regarding remote work, employers are strongly encouraged to contact the authors of this article or any other attorney in Venable's Labor and Employment Group with questions regarding the wage transparency requirements.