UPDATE: New York City Council Amends Salary Transparency Law, Which Now Awaits the Mayor’s Signature

As previously outlined here, in January 2022, the New York City Council enacted an amendment to the New York City Human Rights Law to require employers to list salary information in job postings.  The law will require that employers post what they believe in good faith to be the minimum and maximum salary for any position for which they publish a job posting.  The new law is part of an effort to address pay inequity through transparency.    

Consistent with other recent amendments to employment laws at the New York State and City levels, the amendment defines “employees” to include full and part-time employees, permanent and temporary employees, interns, independent contractors, and employees who are family members of the employer.  Crucially, this means that New York City employers may not withhold salary information by classifying the posting as for an independent contractor role.  Further, the law applies not only to job postings for external hires, but also to internal promotion and transfer opportunities.  

Employers who fail to include the minimum and maximum salary offered for any position located within New York City may be subject to penalties.  Moreover, by making the withholding of salary information an “unlawful discriminatory practice” under Section 8-107 of the New York City Human Rights Law, the New York City Council has created a private right of action for violations of the new law—although, as discussed below, standing to bring such an action will no longer be available to as large a group as initially contemplated.

The salary transparency was initially scheduled to take effect in May 2022; however, following significant pushback by businesses, the implementation of the new law has been postponed to November 1, 2022.  Contemporaneously, the New York City Council also passed an amendment to the law that narrows the scope of the law in a few minor but not insignificant ways.

For example, while the initial bill provided for a broad private right of action for any individual aggrieved by non-compliant job postings, the law now limits standing to current employees.  In all likelihood, this will severely limit private enforcement of the new law.  Indeed, it stands to reason that external applicants would be the most likely to pursue claims based on violations of the law.  That said, employees who apply for internal promotions or transfers may still pursue claims for violations of the salary transparency law, and external applicants may still request enforcement by the New York City Commission on Human Rights.  Still, the dissonance of barring external applicants from bringing claims under a law designed to create salary transparency is difficult to ignore. 

Moreover, the amended draft of the law now allows employers 30 days from service of a pleading to cure their violations of the law.  If cured within 30 days, employers can avoid the imposition of civil penalties.  Accordingly, the amendment not only narrows those who have standing to seek relief, but also incorporates a cure period that, for many applicants, is likely to quell efforts at enforcement altogether.  Crucially, the amendment does not include a previously discussed change that would have excluded small employers by increasing the threshold for application of the law from four employees to 15.

In short, by amending the salary transparency law, the New York City Council has removed significant provisions that strip the law of some of its teeth.  The new law will undoubtedly be a step forward in the fight for pay transparency; however, it seems that the law as initially drafted was too good to be true.  Further to this point, the amended legislation still awaits the signature of Mayor Eric Adams, meaning that further narrowing of the law’s protections and enforcement mechanisms could be on the horizon.

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Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour, personal injury and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Georgia and Pennsylvania.

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About Alex Hartzband

Alex Hartzband's practice is focused on employment litigation. Alex is a senior associate in the firm's New York office.

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