Are You Ready for the Pay Transparency Law?

Following the lead of New York City and other state and local jurisdictions, New York State’s pay transparency law will be effective September 17, 2023. The law ushers in a fundamental change in how employers will recruit and hire employees. In so doing it poses significant compliance and human resource management challenges.

The law requires that employers of four or more employees disclose the salary or compensation range for any advertised position. The definition of “advertised” is broad and covers information concerning a position opening made “available to a pool of potential applicants for internal or public viewing”. As such, the law covers both internal and external candidates, as well as job transfer opportunities. It also covers communication in any form, print or electronic.

Many remote positions will be impacted by the law since it applies to jobs performed in whole or in part within New York State and positions that are performed outside of the State but report to a supervisor within it. Commissioned positions are covered as well and require, generally, that employers provide a statement explaining the applicable commission structure. Finally, if job descriptions exist for the positions employers must disclose this information as well.

Employers should prepare well in advance of the September 17 effective date to both modify their recruitment process to comply with the points above and to assess how pay transparency in job advertisements will impact current employees. It is certain that employees in the same or similar roles as those being advertised will compare their existing compensation and job duties to those being promoted for new hires. Such comparisons can raise significant issues with respect to pay equity, job responsibilities and overall fairness. Employers are urged to consider an internal wage analysis, along with possible adjustments, before undertaking new recruitment processes in compliance with the pay transparency law.