Some years ago, we discussed whether organizations should make their pay transparent, which typically includes practices such as giving all staff access to salary ranges and posting that information externally when recruiting applicants. Pay transparency is a controversial subject that was optional for NYC employers until now.
NYC passed a bill requiring salary ranges be posted in job ads. The bill lapsed into law on January 15, 2022, and goes into affect on May 15, 2022. The law applies to employers with four or more employees for both private and public sectors. The only exception to the four-person rule are employers of domestic workers, who must post salary information regardless of staff size. The requirement also includes promotions and transfer opportunities; so, it is advisable to make this an ongoing practice when developing or updating job descriptions.
NY follows a nationwide trend of legislation requiring pay transparency (other states include California, Colorado, Connecticut, Maryland, and Washington). As a result, we recommend that multi-state employers consider implementing this policy across all locations for consistency purposes and being prepared as more localities follow this trend.
To be up and running in May, employers should review their salary ranges now, ensure they are up to date and applied consistently across all levels and departments. It is advisable to post salary ranges internally first and have conversations with employees whose salaries may not be aligned or need to be fixed before sharing externally.
Although some executives are concerned about the new rule increasing their payroll as applicants tend to ask for range maximums, there are various benefits of putting this in practice:
There is alignment between candidates and organizations salaries from the get-go, making the recruitment process more straightforward
Transparency in pay tends to alleviate salary negotiations
Pay transparency pushes organizations to be equitable and fair with pay for the job performed rather than previous experience or degrees, closing pay gaps and leveling the playing field for historically marginalized communities
Salary ranges that are available internally tend to promote mobility within the organization
Clear salary structures tend to provide a sense of trust that can lead to higher employee retention
Contact Kiwi Partners' HR Services if you need assistance in strategizing the rollout of this mandate at your organization.