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Pay Transparency Requirements Take Effect in New York City

Companies hiring in New York City have been changing the way they advertise job openings in response to the new pay transparency law. The New York City pay transparency law's effective date was November 1, 2022, and since then, companies with four or more employees must post the pay range for every job posting. The law covers all NYC-based companies. It also covers companies beyond city limits posting remote jobs that may be filled by NYC-based workers.

New York City Pay Transparency Law Also Causes Confusion

The law seems straightforward: every job listing must include a minimum and a maximum salary or hourly wage. However, this is causing consternation for some employers and confusion for many job seekers. This is because the law is not specific about how companies should determine pay ranges or about how wide pay ranges can be. It states only that the numbers must be “good faith” estimates of the salary range. 

According to Bloomberg News, which has been analyzing new job postings, some companies have started posting huge pay ranges. In some cases, the maximum pay is over twice the minimum. To job seekers, these pay ranges seem too large to be meaningful. These job seekers then wonder whether the company is really reporting its pay ranges “in good faith” and what it might actually pay for the job. 

Meanwhile, at least one compensation analytics firm has speculated that employers are worried that current employees will see the posted ranges and become upset. 

Pay transparency legislation like New York’s can be challenging. However, we’ve seen that the best response is generally for companies to go through the tough work of clarifying their pay structures internally. This means making sure that pay ranges are determined based on objective, gender-neutral criteria that the company can explain to current and potential workers. Defined criteria should also be used to figure out where employees and new hires should fall within those pay ranges.

After laying this groundwork, companies can then post pay ranges that are truly “in good faith”. They’ll also be better prepared to respond to current employees’ questions about their pay.

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Training leaders and managers on pay equity and transparency

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Like any investment, pay equity work needs to be protected and future-proofed. Good policies and tools are a start. But to sustain fair pay decades into the future, the organization’s leaders and managers need to be trained on pay equity and pay transparency principles and practices. This article discusses what this training should cover and gives a few considerations for its delivery.

How to train leaders and managers for pay equity
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Whitepaper offers recommendations for transposing EU directive into national law

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How to transpose the EU pay transparency directive into national law? A team of experts, including our own Margrét Bjarnadóttir, provide guidance on how nations might balance effectiveness and ease.

Download the EU Whitepaper
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Best Practices for Pay Equity External Communications and Gender Pay Gap Disclosure | Part 2

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Pay equity falls under the “S” in corporate social responsibility (CSR) and environmental, social and governance (ESG). In Part 1 of this two-part blog, we talked about some best practices for talking about pay equity in CSR/ESG reports and other external communications. Now in Part 2, we’ll focus on some great real-life examples that we can learn from.

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