As employers throughout New York State are now determining how to comply with the newest State-wide pay transparency law, which took effect on September 17, 2023, the New York State Department of Labor (DOL) released proposed regulations to facilitate the legislative goal of increasing pay transparency. As discussed in depth here and here, the law requires employers to disclose the pay range and job description (if existing) in job postings. Should these proposed regulations pass the 60-day comment period unchanged, there are several highlights worth noting:
- Employers that advertise job openings must include the base rate of pay for the position.
Under the proposed regulations, advertisements for job openings must contain the range of compensation the employer believes in good faith to be an accurate range for the job opening at the time of posting the advertisement. The proposed regulations make clear that only the base rate of pay needs to be disclosed. Accordingly, the value of other forms of compensation or benefits such as insurance, paid time off, and potential or expected bonuses, tips, and commissions, to name a few, are prohibited from being included in the expression of the base rate.
The DOL highlighted that for employers who advertise a job opening for a position subject to additional compensation (such as tipping within the service and hospitality industry or bonuses/commissions in other industries), employers may disclose that additional forms of compensation above the base rate may be included (i.e., “[base rate] plus bonus”).
- The listed range of compensation must be provided in “good faith” by the employer.
The proposed regulations specify that when calculating the range of compensation, employers may consider various factors, such as the job market, current employee compensation levels, hiring budget, and experience and education levels acceptable for the opportunity.
- Misrepresented or overly broad ranges of compensation lack “good faith.”
The proposed regulations provide examples of when an advertised range of compensation lacks a “good faith” basis, such as when an employer misrepresents the rate the employer is willing to pay a successful applicant by making the rate deliberately lower or higher. Another example of conduct lacking “good faith” is when an employer posts an overly broad range of compensation without further explanation, such that it has the effect of preventing applicants from understanding the legitimate range of compensation the employer is willing to pay a successful applicant for the job opening at the time of posting the advertisement.
- Ranges of compensation cannot be open ended.
Statements such as “$20 per hour and up” or “maximum $50,000 per year” are prohibited. However, where the rate of pay is fixed, only that rate needs to be included (e.g., $25 per hour).
- Employers advertising job openings with multiple locations or multiple levels of seniority must include compensation ranges for each individual job opening.
Advertisements for job openings that are intended to cover multiple geographical locations or include multiple levels of seniority or supervisory authority must include the corresponding ranges of compensation for each individual job opening. If the posting or advertisement is for a single job opening or a single geographic location or region, only one range of compensation is necessary.
- Advertisements posted through a third-party, unless “scraped,” are also covered under the regulations.
Employers will not be held responsible for advertisements that are “scraped,” meaning automatically aggregated electronically and re-posted by a third party without the employer’s knowledge or consent. However, if the employer gives consent to a third-party such as a recruiter or job listing website to post the advertisement, the advertisement must conform to the regulatory requirements.
What’s Next?
Employers who have not already adjusted their job postings and advertisements to comply with the new law should do so immediately. Although the proposed regulations will not be binding until adopted after the 60-day comment period expires on November 12, 2023, they can be relied on for guidance.
*Daniel J. Glicker, a Law Clerk – Admission Pending (not admitted to the practice of law) in the firm’s New York office, contributed to the preparation of this post.
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