By: Ty Hyderally, Esq., Jennifer Vorih, Esq., and Adela Barbura

Senate Bill S9427A, commonly known as the New York State Pay Transparency Law, will take effect on September 17, 2023. The law will require employers in New York State to “disclose compensation or range of compensation to applicants and employees” for advertised promotions and jobs.

As defined by the new law, “advertise” means “to make available to a pool of potential applicants for internal or public viewing, including electronically, a written description of an employment opportunity.” Additionally, “range of compensation” is defined as “the minimum and maximum annual salary or hourly range of compensations for a job, promotion, or transfer opportunity that the employer in good faith believes to be accurate at the time of the posting of an advertisement for such opportunity.”

The law will affect any employer, employment agency, employee, or agent “employing four of more employees in any occupation, industry, trade, business or service.” These affected groups are prohibited from “advertis[ing] a job, promotion, or transfer opportunity that will physically be performed, at least in part, in the state of New York … without disclosing the following:

• (i) the compensation or a range of compensation for such job, promotion, or transfer opportunity; and
• (ii) the job description for such job, promotion, or transfer opportunity, if such description exists.”

These regulations also encompass job, promotion, or transfer opportunities that will “physically be performed outside of New York but reported] to a supervisor, office, or other work site in New York.”

Furthermore, employers are required to keep and maintain records, “including, but not limited to, the history of compensation ranges for each job, promotion, or transfer opportunity and the job descriptions for such positions, if such descriptions exist.” This record-keeping requirement is a way to check an employer’s compliance with the new law, which is helpful because it is very simple for employers to advertise very broad salary ranges and defeat the purpose of the new law.

The bill explicitly notes that employers may not engage in retaliatory actions against any current employee or applicant who exercises any rights covered by the law. An employer is also prohibited from refusing to “interview, hire, promote, [or] employ” current employees or applicants who exercise their rights under the law.

Because there is no clear private right of action under the new law, covered employees can pursue a violation by filing a complaint with the New York Commissioner of Labor. Any employer who fails to comply with the bill will face civil penalties of up to $1,000 for the first violation, $2,000 for a second violation, and $3,000 for a third violation. Various factors are considered when determining the penalty imposed on the employer: business size, good faith of the employer, gravity of violation, and history of previous violations.  However, an employee who makes a complaint about a violation of the law who is then retaliated against, may have a whistleblower claim that the employee could then pursue.

We hope that New York State employers will comply with the new law and modify their job advertisements as necessary. This bill serves as a huge win for employees and potential employees in New York, who are now guaranteed pay transparency in job postings. New Jersey employees and employers should also be aware that New Jersey is considering similar legislation.

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