Mandatory Wage Transparency, An Important Tool to Ensure Proper Compensation

coworkers collaborating

For a very long time, discussing your salary with a coworker was considered taboo. To this day, it remains a touchy, awkward topic for many employees. However, as a state, New York has pivoted away from the notion that compensation is private and embraced the concept of wage transparency.

Wage transparency, in this context, is the practice of making salary information openly accessible to current and potential employees. Theoretically, it can uncover the presence of discriminatory pay practices; it could also highlight when new and often less experienced, employees are being paid significantly higher salaries than their more senior counterparts. Our firm wants to ensure that all of our clients are fairly compensated. In this post, we wish to draw your attention to a legal development--going into effect soon--that may be used as a tool to determine whether you are being paid the amount that you deserve.

New York State’s Salary Transparency Law

Starting on September 17, 2023, New York will require employers with four or more employees to disclose the compensation, or range of compensation, in any advertisement for a job opening, promotion, or transfer opportunity. The law defines “Range of Compensation” as the minimum and maximum annual salary or hourly range. Those amounts must accurately reflect the employer’s range for the position at the time of the posting. The advertisement must also include any existing job descriptions. In preparation for potential future litigation, employers will be required to keep records that show a history of compensation ranges for each job opportunity.

Employers that violate this law will be subject to a monetary penalty. Applicants may report noncompliance to the Department of Labor. While applicants cannot bring a lawsuit on the basis that the advertisement did not include a compensation range; they can bring a lawsuit if the employer retaliates against them for alerting the Department of Labor. Current employees may bring lawsuits against their employers if the compensation range reveals discriminatory pay practices.

Does this Cover Remote Workers?

Yes, under the amended law, job postings will need to include pay ranges for any jobs outside of New York, where the employee reports to a supervisor, office, or other worksite within New York. Many remote jobs fit this description and will need to include a salary range in their postings.

Why is this an Important Tool?

Wage transparency is important because it may reveal wage discrimination. Discrimination in pay occurs when an employee is paid less than his or her coworker for the same work because of his or her gender, race, or other characteristics. If disparities exist between similarly situated employees, it may indicate the presence of discriminatory pay practices. For example, an employee may discover that certain genders or races are consistently paid less than their counterparts within their company. These pay practices are illegal and grounds for litigation. With transparent salary information, it will be easier to identify and analyze these patterns and trends.

Both state and federal law prohibit wage discrimination. One law is the Equal Pay Act of 1963. The Equal Pay Act is a federal law that aims to address gender-based wage discrimination and ensure that employees are paid fairly regardless of their gender. The law requires employers to pay men and women equally for performing jobs that require substantially equal skill, effort, and responsibility, under similar working conditions. Additionally, the Equal Pay Act states that, if there is an inequality in compensation between men and women, employers cannot reduce the wages of either sex to comply with the law. Under New York State law, employees have the express right to discuss compensation and may not be disciplined for doing so. Perhaps greater pay equity may come from discussing compensation; but this new pay transparency law should at least give an idea to employees of the current market rate for the value of their services.

Knowing the compensation range may also provide a valuable tool for negotiating a salary when starting a new job, or when seeking a raise for an existing position. With salary ranges as public knowledge, it will be easier for employees, and their attorneys, to facilitate an open dialogue with an employer about compensation.

Conclusion

Starting September 17, 2023, employees will be handed a potentially helpful tool for negotiating fair pay and taking legal action to combat discrimination, if necessary.

If a job posting raises a similar concern, or if you have questions about your Wage and Hour or Employment situation, please feel free to contact us here. We have many years of experience handling such matters and will be able to assist you in resolving the dispute.

To learn more about these topics, you may want to review our information provided on these pages: Employment Law, Wage and Overtime Disputes, Fair Labor Standard Act and Discrimination.

You may learn more about us and how we operate by visiting these pages: About Us, What Sets Us Apart, and Learn More About Us.

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