New York City will require most companies to put a salary range on their job postings starting next month as major companies like Goldman Sachs, Pfizer and JetBlue push for a delay and warn that the rule would negatively affect hiring.
The law, passed by New York City Council in December, requires companies in the city with four or more employees to post the lowest and highest wage they would pay for each position.
It exempts employees with fewer than four employees as well as temporary staffing agencies.
The disclosure is meant to address the gender pay gap and help employees learn what their work is actually worth on the market. In 2020, women earned 84 percent of what men did, according to a Pew Research Center analysis.
Companies are pushing back agains the bill, calling it ‘burdensome’ and wondering what it would mean for firms that have workers in various states, where similar legislation is popping up across the country. Some have also noted that they may have to start answering to current employees who make less than the ranges advertised for the role they’re currently doing.
Last month, city lawmakers proposed an amendment that would delay implementation until November and exclude companies with fewer than 15 employees, as opposed to the current four.
A law set to take effect on May 15 will require all New York City employers with four or more workers to include salary ranges in their job postings
The law is meant to address the gender wage gap and other forms of pay inequality. According to a Pew analysis, the gender wage gap has remained stable for the past 15 years
The law, as it stands now, will take effect on May 15 after it was passed by City Council in December. It asks New York City employers to list a salary range on job posts.
‘The range for the listed maximum and minimum salary would extend from the lowest salary to the highest salary that the employer in good faith believes it would pay for the advertised job, promotion, or transfer,’ the text states.
Supporters say it would help address the gender pay gap and help workers demand what they’re worth.
‘This is one of those laws where if you’re doing the right thing, then you have nothing to worry about,’ State Senator Jessica Ramos, a Democrat who represents parts of Queens, told Bloomberg.
‘If there are companies that are highly concerned about this, well, then that’s a red flag to me.’
The law is part of a slew of legislation in New York City aimed at making work more fair. In 2020, a salary history ban took effect preventing all employees from asking about a candidate’s previous salary. It also prevents employers from getting the information from other sources.
According to a Pew analysis released last year, the gender wage gap has remained stable for the past 15 years, though it has improved from the 1980s.
‘Women ages 25 to 34 earned 93 cents for every dollar a man in the same age group earned on average [in 2020].
‘This is one of those laws where if you’re doing the right thing, then you have nothing to worry about,’ said State Senator Jessica Ramos, a Democrat representing parts of Queens
‘In 1980, women ages 25 to 34 earned 33 cents less than their male counterparts, compared with 7 cents in 2020. The estimated 16-cent gender pay gap among all workers in 2020 was down from 36 cents in 1980.’
Pew cited factors like motherhood, which can interrupt career paths and have a long-term effect on earning, as well as the overrepresentation of women in lower-paid jobs. It also mentioned difficult-to-measure factors like gender discrimination.
Jeff Moriarty, executive director of the Hoffman Center for Business Ethics at Bentley University, told Fast Company magazine that the New York bill is good for employers and employees alike.
‘If people don’t know what others in their organization get paid for doing the sort of work they do, they won’t have an opportunity to call out unjust pay disparities,’ Moriarty said.
‘Knowing what people get paid is good for employees who are discriminated against, as well as for companies themselves.’
Companies say the law is difficult to follow and burdensome.
‘Employers are trying to understand what this means and what their obligations are under this law,’ Melissa Camire of the law firm Fisher & Phillips LLP told the Wall Street Journal.
She’s encouraging companies to make the necessary changes to their job posts even if the implementation date is delayed to November.
‘May 15 is just a few weeks away, so you can’t ignore that may be the date you need to start doing this.’
City Council introduced an amendment to the law that would delay its implementation until November after pressure from business groups. Some companies worry about how to explain to current employees why they’re making less than the maximum in the job posts
Jeanne Stewart, who runs a human resources consulting firm, is also advising companies to change their postings starting now, recently telling one company to take down a half-dozen listings and put them back up with salary ranges.
‘I’m just like, “Remove them, and we’re not putting them back up until we have good-faith ranges,” she said.
Hari Prasad, founder and CEO of Yosi Health, told the Journal that the new rule would be good for him, because can now compare his salary offers to those of his competitors.
‘This is going to make the hiring process more efficient,’ he said.
Software company Workato Inc employs 850 people; 30 of them live in the New York area.
Kerry Moore, the company’s vice president of global talent and diversity, says human resources executives are likely to spend the next few weeks meeting with employment attorneys about how to implement the new law.
Moore said the company will likely have to also explain that its salary range is just part of its compensation, not including bonuses and equity. She says her company will also have to prepare managers to answer questions from current employees who may be making less than what the new posts advertise.
Kathryn Wylde, CEO of Partnership for New York City, called aspects of the law burdensome. Her group represents companies like Goldman Sachs, Morgan Stanley, Pfizer and CitiBank
‘There’s just a lot of maybe downstream effects from this,’ Moore told the Wall Street Journal.
One group who opposes the law and is trying to delay its implementation is Partnership for New York City.
It counts among its clients Goldman Sachs, Pfizer, CitiBank, JetBlue, Macy’s, Morgan Stanley, PricewaterhouseCoopers or PWC, United Airlines, American Express, Bank of America, ConEdison, Deloitte, IAC, Etsy, Hearst and IBM, according to its website.
City Council introduced an amendment last month after outcry from companies and business groups.
The amendment would exclude businesses with fewer than 15 employees from putting salary ranges on job posts. It would also exclude posts that don’t specify a position, as well as posts for remote jobs that can be done outside the city, according to Forbes.
The proposed amendment is a sign that ‘Council leadership is willing to listen to concerns of employers and reverse provisions of the salary transparency law that made compliance particularly burdensome,’ said Partnership for New York City CEO Kathryn Wylde.
PowHer New York, an organization that advocates for economic equality, says the proposal is the result of ‘business pressure.’
‘After hailing the NYC Salary Range Law as a critical next step in the fight to close the gender and racial wage gap, the NYC Council is now considering INT. 134 that “tweaks the law’s intention of providing pay equity for women of color, and other minorities,’ said PowHer President Beverly Neufeld in a statement.
‘Advocates are calling on the new progressive City Council, which for the first time in history has a majority female, to reject this attempt to let business pressure obstruct the needs of workers.’
A salary transparency law went into effect in Colorado in January 2021. The state of Washington will require salary ranges on postings made my employees with 15 or more workers starting in January 2023.
Lawmakers in California are considering a similar bill.