September 26, 2023 New York State Pay Transparency Law
KEEPING YOU INFORMED…
This is a supplement to our September 14, 2023 memorandum regarding New York State’s new “Pay Transparency Law” (Labor Law § 194-b).
The NYS Department of Labor (“NYSDOL”) recently released draft regulations, which are not yet in effect, that are intended to clarify and explain the Pay Transparency Law. All non-emergency regulations released by NYS agencies are subject to a period of public review and comment before they can officially go into effect. In this instance, the draft regulations offer insight on the NYSDOL’s interpretation of the Pay Transparency Law.
Employers are reminded that even though the supporting regulations described below are not yet final, the Pay Transparency Law has gone into effect and employers must comply with its existing rules, as presented in our prior memorandum.
Highlights of the proposed regulations are as follows:
• The regulations would only apply to private sector employers. This supports the opinion in our prior memorandum that the Pay Transparency Law does not apply to public employers.
• The regulations would allow employers to make certain exceptions to the maximum compensation value listed on a job description. The NYSDOL assumes that advertised compensation ranges will be geared to attract a range of applicants with similar qualifications and experience as existing employees in similar job positions. If, however, an employer receives an application from a “superstar” candidate who exceeds the expected qualifications for the position, the employer may offer the candidate a salary in excess of the maximum number listed in the job posting.
• All job postings must comply with the Pay Transparency Law regardless of whether they are posted on an employer’s own website or published by a third-party website or print publication.
• A written job posting for all positions is not required. Employers can hire, transfer, or promote employees without first advertising the open job position to the public. But, whenever a job posting is published, the posting must comply with the Pay Transparency Law.
• The advertised minimum and maximum compensation range in a job posting must refer to the base wage or salary only and cannot factor in the cash value of other fringe benefits. Additionally, the compensation range must exclude additional discretionary sources of income, such as tips, bonuses, or commissions. For example, if these regulations are finalized as currently proposed, a job posting for an $18-$20/hour restaurant position may lawfully state “$18-$20/hour plus tips.” It may also lawfully state “$18-$20/hour plus an expected $10/hour in tips.” However, the job posting may not group the expected tips with the wage and advertise, for example, a compensation range of “$28-$30/hour.”
• If a job posting solicits candidates for multiple open positions throughout the State with differing minimum and maximum compensation ranges based on geography, all of the compensation ranges would need to be provided within the job description. If, however, there is so much information that it cannot all reasonably fit inside the allocated space for the job posting, the posting would need to refer job candidates to a source where the full information is available. The source must be “easily accessible” to candidates.
We will continue to monitor the progress of the proposed regulations and any changes made in the final, adopted regulations, if/when they go into effect. The public comment period on these proposed regulations expires on November 12, 2023, after which they could potentially go into effect shortly thereafter or could be revised and submitted for an additional round of public review.
If you have any questions about the Pay Transparency Law or the proposed regulations discussed above, please contact Bryan Georgiady, Sharon Berlin, Alyssa Zuckerman or one of our other attorneys by calling (631) 694-2300.
THIS MEMORANDUM IS MEANT TO ASSIST IN GENERAL UNDERSTANDING OF THE CURRENT LAW. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. THOSE WITH PARTICULAR QUESTIONS SHOULD SEEK THE ADVICE OF COUNSEL.
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