New York Proposes Pay Transparency Rules

Author: Emily Scace, XpertHR Legal Editor

September 15, 2023

With the state's pay transparency law set to take effect on September 17, the New York Department of Labor (NYDOL) has issued proposed regulations clarifying a number of points about the law's application and interpretation.

The pay transparency law requires employers with four or more employees to include a pay range and job description in any advertisement for a job, promotion or transfer opportunity that will be physically performed at least partly in New York or will report to a supervisor, office or other worksite in New York.

The law's applicability to remote workers has been a frequent subject of questions, and the proposed regulations offer some clarity. The rules specify that jobs physically performed outside New York include remote roles. "Incidental or infrequent" presence in New York for work, such as an occasional meeting or conference, or communication with New York-based employees, would not be enough for a position to be considered at least partly performed in New York.

Under the proposed rules, employers would be responsible for ensuring that job advertisements contain all the required information, regardless of whether they use a third-party recruiter or tool such as a website, mailing list, or physical or electronic job board. However, if an ad is "scraped" or automatically aggregated and posted by a third party without the hiring employer's knowledge or consent, the employer would not be liable if the third-party posting omitted the required pay information. The third party, however, may be directly liable.

Possibly in response to reports that employers in other jurisdictions with pay transparency laws have posted overly broad ranges or used other tactics to avoid disclosing salary information in a manner useful to an applicant, the proposed rules elaborate on the meaning of a range of compensation under the law. Key points include the following:

• A pay range cannot be open-ended, such as "$20 per hour and up" or "up to $50,000 per year." Rather, it must have both a minimum and a maximum amount or rate. Alternatively, if the compensation is fixed with no flexibility, it may be simply stated as "$20 per hour" or "$50,000 per year."
• A pay range must be specific to a single opportunity and a single geographic location or region. If an advertisement is intended to cover multiple geographic regions or multiple levels of seniority, the posting must list a separate pay range for each individual opportunity.
• If a role includes tips, bonuses or other forms of compensation and benefits beyond standard base pay, the employer may indicate that fact but may not factor those other forms of compensation into its calculation of the listed pay range. For example, a role may be listed as "$20 per hour plus tips" or "$20 per hour plus an additional estimated $10 per hour in tips," but the employer may not aggregate the base pay and predicted tips to list the pay as "$30 per hour including tips."
• The listed pay range in the job ad must represent the employer's good-faith estimate at the time of posting, which may be informed by factors including the job market, the employer's hiring budget, current employee compensation levels, and experience and education levels appropriate for the role. An employer may ultimately make an offer outside this initial range after collecting additional information through the hiring process. However, deliberately misrepresenting the pay range or posting a range that is so broad as to be meaningless would not be considered "good-faith" actions under the law.

The NYDOL is accepting public comment on the proposed rules through November 13, 2023.