NYC salary transparency law in question as businesses push back

The New York City Council may make significant changes to its landmark salary transparency law before it even takes effect — including delaying enforcement by six months to November.

New York City had set May 15 as the deadline for every job posting to list the minimum and maximum salary for each position. The rule applies to jobs that are remote or in-person, salaried or hourly, that will be performed in the city by an employee working for a company with four or more employees.

In an hours-long meeting on Tuesday, the Council Committee on Civil and Human Rights discussed an amendment that would exempt companies with fewer than 15 employees, exclude certain positions and move the effective date to Nov. 1. The changes would also allow businesses to post general “help wanted” listings, without a specific role, and not include salary information.

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The proposed amendment was laid over by the committee, meaning the action was postponed on the bill, as lawmakers weigh testimony from small business owners and other corporate leaders who came out to advocate for the changes.

Business pushback

New York’s five borough chambers of commerce and the Partnership for New York City, a business group composed of the city’s largest companies, including JPMorgan Chase and Goldman Sachs, pushed back against the law and said many of the 200,000 businesses and 30,000 nonprofit organizations have little knowledge of the legislation ahead of the May 15 deadline.

They said the salary disclosure law was passed “without any meaningful public input or consultation with employers,” according to an April 4 letter to the City Council. “It also comes in the middle of a local labor shortage, particularly in those sectors most impacted by the pandemic: health care, retail, and food services.”

In the letter, the group outlined that compensation offered during the tight labor marker may be higher than what other employees are making. In the corporate sector, they said employers seeking to diversify their executive teams may offer higher compensation for people of color. To that end, they are seeking exemptions for employers in industries with severe labor shortages and clarification that the law applies only to jobs that are located at least partly in New York City.

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“During a labor shortage, or in the context of achieving diversity goals, the posted maximum may be significantly higher than the historical salary ranges, creating dissatisfaction in the workforce and demands to adjust existing pay scales that the employer may be unable to afford,” the group said.

Creating loopholes

PowHer New York, a nonprofit that pushed for the original law, is opposing the amendment as “dangerous,” creating loopholes that would allow many employers to avoid compliance. In a press conference before the hearing on Tuesday, supporters of the law, including Gloria Middleton, president of CWA 1180 labor union that represents 9,000 active workers and 6,000 retirees in the city, urged the City Council to reject the changes and let the law take effect as scheduled.

The ultimate goal of pay transparency laws is to help reduce a stubborn pay gap between men and women — particularly women of color. States and cities are also increasingly prohibiting companies from asking candidates what they earned in previous jobs.

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At least seven states now require companies to produce salary information with job postings, or upon the request of job seekers. Colorado, Nevada, Connecticut, California, Washington, and Maryland have laws with some form of salary-range disclosure required. Rhode Island will join them in January 2023. Similar laws are under consideration in Massachusetts and South Carolina. New York is the first major metropolitan city in the U.S. to enact such legislation.

Public hearing

The time available for business owners to get ready pay disclosure was insufficient, especially for minority business owners, said Kathryn Wylde, CEO of Partnership for New York City. With more than 200,000 open jobs in the city, the business community is wary of any regulations that will complicate hiring or open companies up to litigation if they pay more than the advertised maximum to hire out-of-state or among under-represented groups, Wylde said.

Some minority small business owners testified about concerns that publishing pay ranges would allow larger competitors to outbid them for talent in the tight job market.

Read more: Salary benchmarking: For remote teams, should pay be based on role or location?

“If I publish a maximum salary for an engineer, my majority-owned competitors will easily outbid me,” said Barbara Kushner, who owns a construction management company.

But depriving potential employees of pay information, particularly women and people of color who are already underpaid, puts them at a disadvantage, said Andrea Johnson, director of state policy and workplace justice at the National Women’s Law Center.

“Providing the salary range helps narrow gender wage gaps that otherwise might be possible in negotiation where the salary range isn’t disclosed,” she said.

Raising the minimum size of companies that must follow the law to 15 workers from four would put the rule out of sync with the rest of New York’s discrimination rules, which apply to businesses with four or more workers, said New York State Senator Jessica Ramos, who has proposed a similar state law patterned after the New York City rule. "On its face, it weakens the law," she said.

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The change would also mean that about 58,000 companies employing 500,000 people would be exempt from salary disclosure, said Debipriya Chatterjee, a senior economist for the nonprofit Community Service Society of New York.

For Elizabeth Stone, a New York waitress, the lack of salary information makes it difficult to know whether she should change jobs or demand more from her current employer.

“I deserve to know what I can make as a waitress in Brooklyn,” she said at the hearing.

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