The Advisors' Blog

Effective today, under Local Law 32, New York City joins Colorado, California and other states in requiring companies to disclose a range for base salary or hourly pay in ads for any job opening (including promotions or transfers) that “can or will” be performed in NYC.

The law won’t directly impact executive hiring that is conducted through a search firm, because it applies only to “advertisements” and doesn’t prohibit employers from hiring without using an advertisement. However, many compensation committees are taking on broader “human capital” oversight responsibilities and are overseeing pay equity & compliance issues in connection with that.

In the near-term, companies will need to navigate compliance strategies for this and similar laws. In the longer-term, the growing number of pay transparency laws likely will lead to questions from employees (and potentially shareholders) about perceived pay gaps & inequities, and require a more holistic & rigorous strategy for setting & communicating pay. To prepare, companies that don’t already conduct periodic pay equity audits should consider doing so (see this transcript from our 2020 webcast on the mechanics of doing this).

NYC has posted this “fact sheet” that explains the ins & outs of Local Law 32. This Holland & Knight memo summarizes key points. Here are a few excerpts:

Which Employees Are Covered? The Law covers all employers with four or more employees or one or more domestic workers, provided at least one of those employees works in New York City. The four employees do not need to work in the same location or all work in New York City. Owners and individual employers count toward the four employees, as do independent contractors, part-time employees, paid interns and domestic workers.

Which Job Postings Are Covered? The Law applies to any advertisement for a job, promotion or transfer opportunity that can or will be performed in New York City. The Commission on Human Rights defines “advertisement” broadly to include any written description of an available job, promotion or transfer opportunity that is publicized to a pool of potential applicants, regardless of the medium in which the advertisement is disseminated.

Does the Law Apply to a Posting for a Remote or Hybrid position? The Law applies to a posting for a fully remote or hybrid position, if the position can or will be performed in New York City, in whole or in part, whether from an office, in the field or remotely from the employee’s home.

What Are the Potential Consequences of Noncompliance with the Law? The NYC Commission on Human Rights enforces the Law. Employers who violate the Law are subject to paying monetary damages (if any) to adversely affected individuals and being directed to amend advertisements and postings, create or update policies, conduct training, provide notices of rights to employees or applicants, and engage in other forms of affirmative relief.

An employer will receive a warning for a first complaint of noncompliance, provided the employer shows it cured its noncompliance within 30 days of receiving the warning. An employer may have to pay civil penalties up to $250,000 for an uncured first violation and any subsequent violations.

This NYT article and this WSJ article highlight the approaches that a few big companies are taking to this new requirement – and they note that a similar law is pending in New York state. We’re posting memos that explain how to comply with various state & local laws in our “Gender & Racial Pay Equity” Practice Area.

– Liz Dunshee