- A new law takes effect today requiring most New York City employers to disclose salary ranges in job postings.
- For candidates, this could mean strides towards pay equity, particularly for women and people of color.
How different would your job search be if you knew from the start how much money you'd make in a position?
A lot of New Yorkers are about to find out, as a new salary transparency law takes effect today in New York City. Here's what companies and candidates should know about it.
What the law says
Employers with four or more employees, at least one of whom works in the city, must list "good faith" salary ranges on job ads, promotions, and transfer opportunities.
Ranges can't be open-ended, such as "$20 per hour or more," but the minimum and maximum can be the same, such as "$20 per hour," if the employer has no flexibility on salary. The law covers base pay, but not other compensation and benefits. Temporary staffing firms are exempted.
What this means for employees
Pay transparency could help narrow the gender and racial wage gap, making strides towards pay equity — particularly for women and people of color, supporters say.
"Part of this new law is being able to put people on an equal playing field so they can negotiate their salary from a fair starting point," said Robert Boersma, vice president of operations for North America at Talent.com.
Because employers must list a minimum and maximum salary, candidates could be better positioned to negotiate for more if an employer is lowballing them because they can push for concrete reasons on why their offer lies at a certain point in the range.
What employers should expect
The law could also have a big effect on current employees.
Transparency may pressure some companies to offer higher pay, which can help them stay competitive in the talent war. But it could also exacerbate pay compression, the phenomenon in which new hires' pay gains more and more ground on existing staffers' pay. Employers in this case may need to adjust their salary bands, or risk losing talent.
"Employers really want to start to think about how to create a salary range that reflects your current workforce," said Farrell Fritz employment attorney Domenique Camacho Moran. "If you cannot hire talent at that range, you have to think about whether the entire range needs to be bumped for your current employees."
To comply with the law, employers should structure a pay program and decide what factors affect where someone's salary falls in a range, making sure everyone in the hiring process is on the same page. On top of that, employers should broach pay conversations around the new law with existing staff, experts say.
"Get ahead of it by communicating it to your employees rather than letting them find that information of their own accord," Boersma said. "Make sure there's an outlet for people to have those conversations without building up any sort of resentment."
Obstacles to compliance
Though the law takes effect on November 1, it'll take a while to get to full compliance.
There may still be confusion about the law's requirements, for example — particularly the vague "good faith" descriptor at its heart.
"The definition of good faith is the big question at the moment," Moran said.
New York City's Commission on Human Rights will investigate complaints alleging violations of the law. Employers found to be non-compliant will get a first warning, without a monetary penalty, and have 30 days to list salary ranges. Subsequent violations can cost employers up to $250,000.
Beyond New York, pay transparency legislation is taking hold in other parts of the country. Colorado, Connecticut, and Nevada enacted such laws last year, and similar legislation will go into effect in California, Rhode Island, and Washington in 2023.
"Arming the workforce with information is powerful and I think it gives workers a very clear indication of what they can demand," Moran said. "That will give them arguably more power."
Do you have something to share about how this law is affecting you or your workplace? Get in touch at sjackson@insider.com.