NYS Publishes Proposed Regulations on Pay Transparency

The New York State Department of Labor (DOL) has posted proposed regulations to implement New York’s Pay Transparency Law that was effective September 17, 2023.  Under this law, employers with four or more employees who advertise a job, promotion or transfer opportunity in New York are required to disclose the following: (i) compensation or a “range of compensation” for such job, promotion or transfer; and (ii) the job description for such job, promotion or transfer, if it exists.   Range of compensation means the minimum and maximum annual salary or hourly range of compensation for a job, promotion or transfer that the employer in good faith believes to be accurate at the time of posting of an advertisement. 

Remote Workers

The pay disclosure obligations in the law apply to advertisements for job, promotion, or transfer opportunities that “will physically be performed” in the state (emphasis added) or “that will physically be performed outside the state of New York” but “report[] to a supervisor, office, or other work site in the state of New York.”  Thus, the proposed regulations suggest that pay disclosure obligations apply to positions that could be filled remotely out of the state if the remote employee would report to an office in New York. At the same time, the proposed regulations state that “[i]ncidental or infrequent” visits to New York for work-related purposes, such as “for an occasional meeting or conference” would not alone be sufficient for the opportunity to be considered “physically” performed in the state. Additionally, “mere communication with employees based” in New York alone would not mean a job is “physically” performed in the state.

By its terms, the pay transparency law will not apply to temporary help firms as defined by New York labor law. However, the proposed regulations clarify that while the pay disclosure requirements do not apply to temporary help firms in hiring temporary workers for other businesses or organizations, the requirements would apply to temporary help firms when they advertise “opportunities to work for the temporary help firm itself.” For example, a temporary help firm would have pay disclosure obligations in an advertisement to fill an administrative assistant position at the firm.

Advertisements for a Job, Promotion, or Transfer Opportunity

The proposed regulations clarify that if an employer does advertise the opportunity, the pay range disclosure obligations would apply “regardless of the medium in which they are posted,” including but not limited to newspaper advertisements, printed flyers, a social media post, or an email to a pool of potential applicants.

The proposed regulations clarify that a job description would not be required in an advertisement if such a description does not exist. Additionally, the proposed regulations specify that in situations where an employer lists a job opportunity to cover multiple geographic locations or the listing is for an opportunity with differing levels of seniority, the employer would be required to provide “multiple ranges of compensation for each individual opportunity.”

Compensation Range Refers to Base Rate of Pay

The proposed regulations provide specifics on what would or would not be required to be included in the disclosed compensation range under the pay transparency law. According to the proposed regulations, employers would be required to disclose the “base rate of pay, regardless of the frequency of payment,” such as “an annual salary, an hourly wage, or a piece rate.” The compensation range would not include other benefits that may be offered in connection with the opportunity, such as health or life insurance, paid time off or vacation days, sick leave, retirement or savings plan contributions, severance pay, overtime pay, or “other forms of compensation such as commissions, tips, bonuses, stocks, or the value of employer-provided meals or lodging.”

According to the pay transparency law, employers must base the minimum and maximum annual salary or hourly rate on what they “believe[] in good faith” are the highest and lowest compensation amounts they will pay the position at the time of the advertisement. The proposed regulations would further define “good faith” belief as the range employers “legitimately believe[] they are willing to pay” for the position in consideration of other contextual factors, “such as the job market, current compensation levels, hiring budget,” and the experience and education level required for the position.

According to the proposed regulations, employers would be allowed to adjust the range if needed, based on information from the hiring process. For example, an employer would be able to raise the pay ranges if after posting for the position it determines that an increased hiring budget is necessary to attract candidates with the desired qualifications.

There will be a 60-day public comment period, during which employers and other stakeholders can provide comments. The comment period is set to expire on November 12, 2023.  In the meantime, the law is in effect and covered New York employers are expected to comply with its requirements.