Amended New York State Pay Transparency Law to Impact Businesses with 4 or More Employees

Pay transparency continues to be a major focus among state legislatures moving into 2023. In late December 2022, the governor of New York State signed into law legislative bill S.9427-A/A.10477 that will require covered employers in the state to comply with obligations related to pay transparency in job advertisements.

New York is one of seven states as of this publication date that have passed pay transparency legislation, and joins California, Rhode Island, and Washington in implementing such a law in 2023. New York’s law, which applies to employers located in New York state, goes into effect Sept. 17, 2023.

What is Pay Transparency?

Pay transparency is the act of sharing compensation information for positions within your business, including but not limited to pay rates for available positions, pay increases, bonuses, benefits, and more.

The primary goal of pay transparency laws are to help close pay gaps. In 2020, women made 83 cents for every dollar made by men, according to the U.S. Department of Labor. The gender pay gap was greater for black women (64 cents) and Hispanic women (57 cents).

Companies can demonstrate various degrees of pay transparency. For example, one company might choose to share pay ranges for open positions while another business might choose to share specific pay rates for every job. However, all businesses are required to comply with the applicable pay transparency laws in their state or local jurisdiction.

What is Required of Covered Employers Under the NY Pay Transparency Law?

An employer with four or more employees has an obligation to comply with the following requirements*:

• Include the minimum and maximum annual salary or hourly range when advertising a job, promotion, or transfer opportunity under the following conditions:

a. If that job will be performed physically, at least in part, in New York state¹

b. If the job, no matter where it is performed, reports to a supervisor or other site located in New York state

• Disclose the job description if one already exists when advertising a job, promotion, or transfer opportunity

There is some ambiguity in the language of the amendment, but it seems to indicate that a business not located in New York state that wants to advertise a fully remote position might not be covered under the law.

The amendments also changed the record-keeping requirements, so employers would not be required to maintain records of the history of compensation ranges for each job, nor the job description, promotion, or transfer opportunity of such positions. However, it is a best practice to maintain records for a period of time to protect your business, regardless of whether it is required by a specific law.

Are There Other Pay Transparency Laws in NYS?

New York state, as of this publication, has three local jurisdictions with pay transparency laws that went into effect in 2022, including Ithaca (Sept. 1), New York City (Nov. 1), and Westchester County (Nov. 6). According to the state law, none of the provisions of the state law supersede the requirements of any local law, so businesses need to understand and comply with any additional requirements of the pay transparency laws in their local jurisdiction. For example, the NYC law covers employers of even one domestic worker, so the NY state law might not apply to them, but the NYC law would.

The state Labor commission is expected to release further guidance/regulations in advance of the effective date (Sept. 17, 2023).

What Are the Penalties for Noncompliance with NYS Pay Transparency Law?

According to the law, any business found in violation of the provisions will be subject to civil fines as follows:

• $1,000 for the first violation
• $2,000 for the second violation
• $3,000 for the third violation and beyond

There is no private right of action, but individuals may file a complaint with the NYS DOL commissioner. Employers should note that there is also an anti-retaliation provision in the law.

Looking Ahead

Paychex will continue to monitor this topic and provide updates on additional guidance provided by the NYS Commission of Labor. Also, has your business considered the benefits of working with an HR solutions provider that offers an HR Professional?  You’ll get help assessing your needs, simplifying management processes, and identifying employment laws and regulations so you can better navigate compliance challenges.  

* Certain employment agencies are considered eligible employees.

¹ A written statement that details that compensation will be based on commission might meet the disclosure requirements for commission-only jobs.