- New York transparency law addresses remote work. Gov. Kathy Hochul signed an amendment to the state’s existing pay transparency law to ensure remote work will now be covered when the law takes effect Sept. 17.
- A growing trend. New York state is set to become the latest jurisdiction in the U.S. to codify pay transparency, joining California, Colorado, Rhode Island and Washington, among others.
- Stay ahead of the game. Experts say employers across the country should already be working on transparency compliance within their own hiring processes regardless of legislative mandate.
- Build trust. Organizations that are able to effectively develop and communicate pay structures to employees will engender trust and gain a competitve advantage.
Gov. Kathy Hochul recently signed an amendment to New York state’s new pay transparency law that specifically addresses the question of remote work.
The updated law requires employers with more than four employees to disclose compensation in job advertisements that will be performed, at least in part, in the state, but also for remote-work positions that will not be performed in-state but report “to a supervisor, office, or other work site in New York.”
So how will this new law affect employers in the Empire State and beyond?
The Specifics
Despite its status as law, questions remain ahead of its Sept. 17 enforcement date.
For example, it is still unknown whether the law means that all four employees need to be employed within New York state or whether an employer is covered if it employs four employees regardless of location, said Eli Freedberg, a shareholder at Littler.
Also unclear is how effective the punishment will be for violators, as the New York state law does not expressly create a private right of action for violations of the law.
Violations instead will be subject to investigation and prosecution by the state commissioner of labor, with civil penalties not to exceed $1,000 for the first violation, $2,000 for the second violation and $3,000 for the third and subsequent violations.
Read: 2023 Pay Transparency Laws Coming to a State Near You
New York state’s law is also different from several other jurisdictions’ statutes because it requires job advertisements to include a job description if one exists. Thus, it’s unclear how such advertisements will be policed.
The state’s Department of Labor is authorized to “promulgate regulations to clarify this law,” meaning the commissioner will likely issue further guidance on the law in the coming year.
Nonetheless, Freedberg said the new law will place “a substantial burden on businesses to consider a job’s potential reporting structure for all positions within the company to ensure compliance.”
Action Steps for Employers
In order to ensure compliance across all jurisdictions, employers first need to understand where a particular job can be performed and also the reporting structure of open positions, Freedberg said.
“Employers also need to ensure that they are complying with all relevant pay equity laws and that employees with similar job functions receive comparably similar wages, regardless of their identity or membership in protected classes,” he said.
To comply with the job advertisement salary posting laws, employers should conduct a review of the salary ranges they are paying for similar positions, conduct internal reviews of their pay policies and make adjustments as necessary to comply with pay equity requirements.
“These steps should be taken for all remote and in-person positions,” he said.
Employers should also determine and document compensation ranges using existing data or projecting figures on a good-faith basis. Employers should anticipate requests for salary reviews by current employees and consider how to respond to those through existing or new internal practices.
Christine Hendrickson, vice president of strategic initiatives at Syndio, said compliance balances on two pillars: 1) analyzing and ensuring workplace equity; and 2) communicating about it.
“When you can clearly explain why you pay employees what you pay, that they are paid equitably, and that they have a fair shot at advancing, you build trust,” she said.
Employers should be working on their transparency plans if they haven’t already started, said Mariann Madden, North America pay equity co-lead at WTW.
“The various U.S. laws do not allow much time for employers to prepare,” she said. “Sometimes the laws are effective in a matter of months. If you are waiting to prepare until you find a law has been enacted in your backyard, you will not be ready.”
And while there is a lot of focus on the impact to job seekers, Madden said employers also should “keep in mind that these laws will impact anyone involved in making pay decisions, which means that it impacts all levels of jobs within an organization, from entry level to executive.”
In addition to HR, managers also need to be poised to answer questions from both applicants and employees.
“Those organizations getting it right are providing visibility and clarity to employees on their job and pay structures and how pay decisions are being made,” Madden said. “And they are doing so before they must comply with a legislative mandate.”
Transparency Trendspotting
The New York law suggests that legislation intended at codifying transparency in compensation “is certainly a growing trend and we expect many other jurisdictions to quickly follow suit,” said Freedberg.
Hendrickson agreed, noting other transparency laws that are in the works.
“Last year, we saw the laws requiring pay range disclosure on job postings balloon from one to nine jurisdictions, and it is not slowing down this year,” she said. “There are proposed pay scale transparency laws making their way through legislatures in Connecticut, Hawaii Illinois and many more.”
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