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Ask the Expert: The Pay Transparency Laws Become Effective On September 17th. Are You Ready?

Later this month New York will join a handful of States in the US which require greater transparency in wages. In December 2022, the Governor signed into law new wage transparency requirements. This law was amended in March 2023 and will become effective September 17, 2023. 

The new Pay Transparency Law, Labor Law §194-b, applies to employers of four or more employ-ees and mandates disclosure of a “compensation or range of compensation” when an employer is advertising “a job, promotion, or transfer opportunity”. The law also requires employers to post the job description for such “job, promotion, or transfer opportunity, if such description exists”. 

Significantly, the March 2023 amendment to the law expanded its scope to include remote workers. Under this amendment, the law was expanded to include any position (1) which will be physically performed, at least in part, in New York State or (2) in which an out-of-state employee reports to a supervisor, office, or other worksite in New York State. 

The March 2023 amendment also clarified that if a position is entirely based on commission, a range is not required. Instead, the posting need only include “a general statement that compensation shall be based on commission”. 

Be aware, the definition of “advertise” under the new Pay Transparency Law is not limited to new positions or external candidates. It specifically identifies “a pool of potential applicants for internal or public viewing”. 

Failure to comply with this law can be costly. Although individuals do not have a private right of ac-tion against an employer, employers who fail to comply with this law face potential civil penalties of up to $1,000 for a first violation, $2,000 for a second violation, and $3,000 for a third or subsequent violation.