In January, the New York City Council enacted a local law prohibiting employers from posting job listings without minimum and maximum salary information. Beginning in May of 2022, employers that are publishing job listings publicly or internally (including promotions or transfers) are required to include a “good faith” salary range.
The Goal of the Law
According to the law’s sponsors, the law will increase pay transparency and attempt to close the persistent wage gap for women and BIPOC. By providing a “good faith” salary range, potential applicants can decide whether the company’s compensation aligns with their wants and needs. Additionally, it promotes transparency to current employees in similar positions.
Candidate Market & Pay Transparency
New York has led the way in closing the wage gap and increasing pay transparency over the last several years. The tight labor market is giving applicants even more choice, forcing companies to compete openly and loudly for talent.
This law also ushers in a potential headache for some companies who have traditionally tried to keep salaries quiet amongst employees. This law will now give current employees a view into what new recruits are being offered. Companies that have prohibited or even penalized employees from disclosing compensation in the past will have a hard time enforcing these rules moving forward.
An Opportunity for Hiring Managers
While this law may feel as if it solely benefits employees in New York City, it is also a great opportunity for hiring managers to put more pressure on executives and HR to tighten up hiring practices and approve hiring budgets.
Presently, the law only appears to address base salary. Mid-level candidates or those just entering the workforce will likely put more weight into the base salary range. However, more experienced workers understand that the base salary is only one component of a larger package. For these more experienced positions, companies will need to adequately advertise bonuses, RSUs, equity, and other benefits that can significantly impact an applicant’s decision to apply.
What does It Mean?
Details have not been released regarding the definition of good faith or the definition of salary. Additionally, we are awaiting rules that will address the documentation process, penalties, how it applies to remote or hybrid workers, etc. It is likely, however, that it will follow similar laws that the NYC Commission on Civil and Human Rights oversees.