Governor Hochul Signs New York State Pay Transparency Law To Go Into Effect in September 2023

On December 21, 2022, Governor Hochul signed the New York State Pay Transparency Law. (See our previous client alert.) The law will go into effect in 270 days, on September 17, 2023.

As we previously reported, the law will apply to New York State employers with four (4) or more employees. Covered employers will be required to include, in all postings for jobs, promotions, and transfer opportunities, the "minimum and maximum annual salary or hourly range of compensation" that "the employer in good faith believes to be accurate at the time of the posting." The law also requires covered employers to include a job description with the posting, but only if a description already exists. When a position is paid "solely on commission," the posting must include a "general statement that compensation shall be based on commission."

The posting requirement will likely apply to postings for fully remote positions that could be performed by an individual in New York State, as statute says it applies to any position "that can or will be performed, at least in part, within the State of New York."

Employers will also have a record-keeping obligation with regard to "the history of compensation ranges for each job, promotion or transfer opportunity and the job descriptions for such positions, if such descriptions exist."

Employees in New York City will have to comply with both the NYS Pay Transparency Law and the New York City Pay Transparency Law, which differ in some ways, as described in our previous client alert. For example, the NYC law does not require postings to include job descriptions. In addition, while only current employees may bring a claim under the NYC law, the NYS law states that "any person" may file a complaint with the New York State Department of Labor ("NYS DOL"). This means that applicants may also be able to file a complaint.

By contrast, employers located in New York's Westchester County will presumably only have to comply with the NYS law, as a similar Westchester County Pay Transparency Law includes a preemption clause, which, as reported here, states that the law will be "null and void" if a New York State or federal wage transparency law is enacted that "incorporate[es] either the same or substantially similar provisions."

The NYS DOL is expected to publish regulations or guidelines which will hopefully provide guidance on issues not addressed in the NYS law in advance of the September 17, 2023, effective date, including who can file a complaint, whether or not all four employees must be located in New York State for an employer to be covered, the law's application to fully remote positions, the definition of a "posting," whether other components of compensation (such as overtime, bonuses, or benefits) must also be disclosed, and what type of records must be kept and for how long.

Next Steps

As we previously recommended, employers in New York State should review their current compensation ranges to assess whether to make any changes to attract new candidates or retain current employees. Employers should also determine whether they have existing job descriptions, and consider whether any changes should be made to those descriptions, which would have to be included in advertisements under the proposed law.

We will continue to monitor for further developments and will provide new information when it becomes available.