As we discussed in a previous post, effective January 1, 2023, California employers must include pay scales in job postings, and a similar bill in New York was awaiting signature by Governor Kathy Hochul. The California Labor Commissioner has now issued guidance to assist employers in complying with the new law, and the New York State bill was signed into law on December 21, 2022 and is set to take effect on September 17, 2023.
The California Labor Commissioner recently published FAQs (adding to existing FAQs under the state’s equal pay law) with insights for employers on some gray areas in the new law:
Threshold for coverage.The FAQs clarify that an employer is covered by the pay transparency requirements if it reaches the threshold of 15 employees at any point in a pay period they compensate their workers at the minimum higher wage rate for the duration of the entire pay period and going forward as long as they have a minimum of 15 employees. Also, all employees, regardless of the number of hours worked or geographical location, will be included in the count, so long as there is at least one employee located in California.
Job postings for remote positions.The Labor Commissioner interprets the new law to mean that the pay scale must be included on a posting if the position may ever be filled in California, whether in-person or remote.
Information to include in job postings.The FAQs confirm that “pay scale” means the salary or hourly wage range that the employer reasonably expects to pay for a position, and can include just a set hourly or piece rate, rather than a range, if that is what the employer intends to pay. If the position’s hourly or salary wage rate will be based on a piece rate or commissions, the piece rate or commission range must be included in the job posting; however, the posting does not need to include bonuses, tips, or other compensation or tangible benefits provided in addition to a salary or hourly wage. Finally, the Labor Commissioner states that the pay scale must be expressly stated in the posting, and it will not be sufficient to comply with the new law to take shortcuts such as linking the salary range in an electronic posting or including a QR code in a paper posting that will then take the applicant to the salary information.
Effective September 17, 2023, the New York Pay Transparency Law (Senate Bill S9427A) (the “NYPTL”) will require employers with four or more employees to disclose the pay range for any posting for a job, promotion, or transfer opportunity that can or will be performed, at least in part, in the State of New York, along with a job description (if one exists). The law does not specify how the employee threshold will be calculated.
“Compensation range” means the minimum and maximum annual salary or hourly range that the employer in good faith believes is accurate at the time of posting. If the compensation is based solely on commissions, employers must state that in the posting. Employers must also maintain records, including the history of pay ranges for each opportunity and any corresponding job descriptions that exist.
The NYPTL prohibits employers from refusing to interview, hire, promote, employ, or otherwise retaliating against an applicant or current employee for exercising rights under the law. Violations of the NYPTL may result in civil penalties not to exceed $1000 for a first violation, $2000 for a second violation, or $3000 for a third or subsequent violation.
Employers with employees in New York City should also ensure compliance with the similar New York City law, which took effect on November 1, 2022 (addressed in our prior post).