New York State recently passed a law requiring employers with four or more employees to implement pay transparency measures. This new law will have a significant impact on how employers communicate information about salaries and compensation within their organizations. With the passage of this law, New York joins a growing list of states requiring employers to provide pay transparency for their employees. As such, it is essential that employers are aware of their obligations under the new law and take steps to comply.

Overview of New York State Pay Transparency Law

Governor Kathy Hochul signed legislation (S.9427-A/A.10477) now known as New York Labor Law [NYLL] 194-b, establishing a statewide pay transparency law in New York State. New York is one of seven states as of this publication date that have passed pay transparency legislation and joins California, Rhode Island, and Washington in implementing such a law in 2023. New York’s law, which applies to employers located in New York state, goes into effect Sept. 17, 2023.

The gender-based wage gap in the United States has narrowed in recent years. The New York State Pay Transparency Law [FARE Grant] is a recent legislation that aims to promote transparency and fairness in the workplace by requiring employers with four or more employees to implement pay transparency measures. This law is part of a growing trend in many states across the country that recognize the importance of equal pay and the need for employers to communicate information about salaries and compensation openly within their organizations.

Under this new law, employers are required to disclose to their applicants and employees the wage range or rate of pay for each position within the company. This includes providing information about the various elements that contribute to the overall compensation package, such as bonuses, commissions, and benefits. By providing applicants and employees with this information, employers are fostering an environment of transparency and trust, allowing them to better understand their worth and negotiate for fair compensation.

It is important to note that the New York State Pay Transparency Law applies to a wide range of businesses, excluding temporary help firms, which have become increasingly prevalent in today’s workforce. “Temporary help firm” means a business that recruits and hires its own employees, and assigns those employees to perform work at or services for other organizations, to support or supplement the other organization’s workforce, or to provide assistance in special work situations such as, but not limited to, employee absences, skill shortages, seasonal workloads, or to perform special assignments or projects. A temporary help firm shall not be deemed to be a professional employer organization for the purposes of NYLL 916 (5).

Employers in all industries, including healthcare, finance, technology, and retail, are obligated to comply with this law, regardless of their size or geographical location within the state.

Failure to comply with the law can result in significant consequences. Employers who fail to provide the required pay transparency measures may face civil penalties, which can range from monetary fines to legal action brought by employees seeking damages. Employers must understand their obligations under this law and take proactive steps to ensure compliance.

In summary, the New York State Pay Transparency Law is a significant development in the pursuit of equal pay and fairness in the workplace. By requiring employers to implement pay transparency measures, this law aims to empower employees and promote a culture of transparency and trust within organizations. Employers, excluding temporary help firms, must take the necessary steps to understand and comply with this law to avoid potential civil penalties and foster a fair and inclusive workplace for all.

Who does the law apply to?

The New York State Pay Transparency Law applies to a wide range of businesses, ensuring that employers in various industries and of different sizes are required to comply. This law is not limited to a specific sector or geographical location within the state, making it applicable to all businesses operating in New York State.

This means that employers in industries such as healthcare, finance, technology, and retail, among others, are obligated to implement pay transparency measures.

By encompassing a broad range of businesses, the New York State Pay Transparency Law aims to create a level playing field, fostering a culture of transparency and trust within organizations of all sizes. It underscores the state’s dedication to achieving equal pay and ensuring that employees have the necessary information to understand their worth and negotiate fair compensation.

Employers need to understand that failure to comply with the law can result in civil penalties. These penalties can range from monetary fines to legal action brought by applicants or employees seeking damages.

Therefore, it is essential for all businesses, including temporary help firms, to take the necessary steps to ensure compliance and avoid the potential consequences of non-compliance.

Impact on businesses, applicants and employees

The New York State Pay Transparency Law will have a significant impact on businesses, applicants and employees across the state. By requiring employers with four or more employees to implement pay transparency measures, this law aims to promote fairness and equality in the workplace.

For businesses, the impact of this law is twofold. Firstly, employers must now disclose the wage range or rate of pay for each position within their organization. This means that employers will need to review their current pay practices and policies, ensuring that they have accurate and up-to-date information about compensation. It may require adjustments to job descriptions, pay scales, and compensation structures to ensure compliance. Employers will also need to communicate this information openly and transparently to their applicants and employees, fostering a culture of trust and transparency within their organizations.

Secondly, employers must also be aware of the potential penalties for non-compliance with the law. Failure to implement the required pay transparency measures can result in monetary fines and legal action brought by applicants and employees seeking damages. These consequences can have a significant financial and reputational impact on businesses, as well as strain employee relations and morale.

For applicants and employees, the impact of this law is empowering. By providing them with access to information about wage ranges and rates of pay, employers are enabling a better understanding of their worth and negotiating for fair compensation. This increased transparency can help address pay disparities and create a more equitable work environment. Applicants and employees can now make more informed decisions about their careers and financial future, ensuring that their contributions are recognized and valued.

In summary, the New York State Pay Transparency Law has the potential to create a more fair and transparent workplace for businesses, applicants and employees. By fostering a culture of openness and trust, employers can ensure that compensation practices align with the principles of equality and fairness. Applicants and employees can benefit from increased transparency and empowerment, making informed decisions about their careers and financial well-being. Moreover, businesses, applicants and employees need to understand their rights and obligations under this law and take proactive steps to ensure compliance.

Penalties for non-compliance

Failure to comply with the New York State Pay Transparency Law can have significant consequences for employers. The law imposes various penalties for non-compliance, including both monetary fines and the potential for legal action brought by employees seeking damages.

Employers who fail to implement the required pay transparency measures may face civil penalties, which can range from monetary fines to legal action seeking compensation for damages. The exact penalties will depend on the specific circumstances of the non-compliance and the severity of the violation.

Monetary fines can be substantial and can quickly add up, especially for larger employers. Additionally, legal action brought by applicants or employees can result in costly settlements or judgments against the employer. These consequences can hurt a business’s finances and reputation, not to mention the potential for damaging employee relations and morale.

To ensure compliance with the law and avoid these penalties, employers should take proactive steps to understand and meet their obligations. This may include conducting an internal audit of their pay practices, ensuring accurate record-keeping, and providing employees with the required information about wages and compensation.

Employers should also stay informed about any updates or changes to the law and seek legal advice if they have any questions or concerns about their compliance obligations. By taking these proactive measures, employers can protect themselves from potential penalties and create a culture of transparency and trust within their organizations.

In summary, the penalties for non-compliance with the New York State Pay Transparency Law can be significant. Employers should take the necessary steps to understand and meet their obligations under the law to avoid monetary fines and potential legal action. By doing so, employers can demonstrate their commitment to fair and transparent compensation practices and maintain positive relationships with their applicants and employees.

How to ensure compliance with the law

To ensure compliance with the New York State Pay Transparency Law, employers should take proactive steps to understand and meet their obligations. Here are some key strategies to help businesses navigate this new law and avoid potential penalties:

1. Review the law and seek legal advice: Familiarize yourself with the requirements of the New York State Pay Transparency Law and seek legal counsel to ensure a thorough understanding of your compliance obligations. This will help you navigate the nuances of the law and address any specific concerns related to your business.

2. Conduct an internal audit: Evaluate your current pay practices and policies to identify any areas that may not align with the requirements of the law. This may involve reviewing job descriptions, pay scales, and compensation structures. Conducting an internal audit will help you identify any gaps in pay transparency and address them proactively.

3. Communicate with your applicants and employees: Open and transparent communication is crucial in complying with the law. Communicate to your applicants and employees the wage ranges or rates of pay for each position within your organization, including all elements that contribute to compensation. Be prepared to answer any questions or concerns that employees may have and provide the necessary information to foster trust and transparency.

4. Maintain accurate record-keeping: It is essential to keep accurate and up-to-date records of employee compensation, including wage ranges and rates of pay for each position. This will not only ensure compliance with the law but also provide a clear paper trail in case of any audits or legal inquiries.

5. Stay informed and updated: Laws and regulations can change over time. Stay up-to-date with any updates or changes to the New York State Pay Transparency Law and adjust your compliance efforts accordingly. This may involve regular communication with legal counsel or monitoring relevant industry publications and government websites.

By following these strategies, employers can ensure compliance with the New York State Pay Transparency Law and avoid potential penalties. Remember, it is always better to be proactive and transparent, fostering a fair and inclusive workplace for all applicants and employees.

Contact Us

If you believe that the employer has failed to comply as required by the New York State Pay Transparency Law, The Sanders Firm, P.C. is here to help.

At The Sanders Firm, P.C., we understand the importance of equal pay and fair compensation in the workplace. We are dedicated to being a voice for justice when it comes to pay transparency claims.

Contact us today to schedule a consultation and learn how we can assist you with your pay transparency claim.