New York City will require employers to say how much they pay

A particular convention of getting hired in the United States is that one question job seekers may want to ask first – How much does the job actually pay? — is often addressed last. In the world of work, it’s common for employers to keep this vital information secret, keeping candidates in the dark while giving hiring managers a competitive edge in setting salaries.

But that’s changing, and starting Tuesday, New York City will be the latest jurisdiction to require most companies to post salary ranges for open jobs.

The Big Apple is one of a growing number of US cities and states taking steps to shine a light on worker compensation. New laws requiring companies to disclose pay scales in job postings and on their websites aim to equalize bargaining power between employers and employees, empower workers while narrowing long-running pay gaps date for women and people of color.

In California, under a law that takes effect January 1, 2023, companies with more than 15 employees must include pay scales for jobs and share the same information with current employees. In New York, a state law requiring private sector employers to disclose salary ranges in job postings awaits Governor Kathy Hochul’s signature. And Colorado, Connecticut, Maryland, Nevada, Rhode Island and Washington have enacted their own pay transparency laws.

“Good faith” pay scale required

New York City law that takes effect Nov. 1 requires companies to include a “good faith” pay scale for every advertised job. Employers are not required to disclose information about bonuses, benefits and other forms of compensation.

“Going forward, whenever a job posting is posted on an Indeed-like website, in the workplace, or advertised in a newspaper or online, [job seekers] should expect to see a salary range for this position if the work is in New York or could be done in New York,” Domenique Camacho Moran, New York-based labor attorney at Farrell Fritz, told CBS. Money Watch. is to make sure there is pay equity based on the work done as opposed to who might apply for the job.”

In other words, if an employer advertises a job that pays between $60,000 and $90,000 per year, anyone applying for the job can expect starting pay in that range, regardless of age. , sex or race.

“It’s a situation that in the past tended to favor the employer, who could ask about your salary and not reveal what they were going to offer,” said firm partner David Gordon. attorneys Mitchell, Silberberg & Knupp of New York. practice. “It’s part of an overall transfer of information from employer to employee that will help some employees negotiate their compensation.”

The push for pay transparency in some cities and states is also putting pressure on companies that aren’t legally required to disclose pay scales to do so. Almost all workers surveyed by job site said employers should disclose salary ranges in their job postings, and more than half of those surveyed said they would not apply for one. job that doesn’t disclose how much he pays.

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“Employers must show their cards”

The New York City law works in tandem with a January 2020 law that prohibits employers in the state from asking potential and current employees about their salary history, which was also enacted to help close pay gaps and to end potentially discriminatory compensation and hiring practices.

The laws will help workers decide which jobs to apply for based on pay scale, while discouraging employers from seeking “discounts” from employees, who might otherwise accept lower pay.

“Employers are in a position where they have to think very carefully about what they believe in good faith that a particular position should pay,” Jason Habinsky, president of Haynes Boone’s employment practice, told New York at CBS MoneyWatch. “Employers have to show their cards first and put them on the table. You can’t make decisions based on whether someone is in a protected class.”

Salary should be disclosed as a range, not as “up to” or “at least” a certain number.

Habinsky warned that some employers might advertise ranges so wide they would be unnecessary.

“A potential risk is that some employers do not act in good faith and instead of providing a range in good faith, in order to cover themselves, they will provide a much wider range…to give themselves the opportunity to decide what ‘they’ will pay somebody,” Habinsky said. “There’s no point in saying someone gets paid between $5 and $5 million.”

Could lead to more word of mouth hires

Under New York City law, companies are not required to disclose compensation items, including bonuses, benefits, commissions, or tips. And the rules only apply to external job postings and internal postings. This means that if an employer lands a new hire through word of mouth, they are not required to disclose the salary range for the role before making an offer.

“The law does not prohibit employers from hiring without using an ad,” said New York labor attorney Josh Zuckerberg. “There is no law that says you have to post jobs.”

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This could lead to more word of mouth hires.

“Certain types of employers may call headhunters and say, ‘We’re looking for this type of position, what can you find me?’ — if you don’t want to broadcast the salary,” Zuckerberg said. “There is a chance that there will be less transparency, not more.”

“Potential Fallout”

The buoyant job market has pushed up workers’ wages and forced employers to pay top dollar to attract talent. An employer could very well have to pay a new hire more money to perform the same function as an existing employee, which could create tension and division in the workplace.

“There’s a lot of potential fallout as a result of this law. You could have a current employee seeing what potential employees are paid, and that can lead to unhappy employees and hurt feelings,” Habinsky said.

Any employer with four or more workers, at least one of whom works in New York, should prepare to comply with the new regulations, labor and labor attorneys say.

“It would be prudent for any employer who does not want to break the law to have someone in place to monitor job postings, internal or external, to ensure they are complying with what the law requires. “, Gordon said.

Human resources staff should also be prepared to explain any pay gaps, said Carol Goodman, president of Herrick Feinstein’s employment practice.

“HR departments need to be prepared to answer questions from existing employees who may call and say, ‘I see an offer for a position similar to the one I’m in but my pay is lower,'” she said. declared. “HR professionals will want to be prepared to talk about this with their employees.”

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