New York City enacts new pay transparency law: How new rule will change salary negotiations at the workplace
New York City will soon join a growing list of cities where employers are required to include maximum and minimum salary range for a job opening
Image used for representational purposes. AFP
New York City will soon join a growing list of cities where employers are required to include maximum and minimum salary range for a job opening.
Under the New York City Human Rights Law (NYCHRL), it will be an “unlawful discriminatory practice” for an employer to put a job posting without clarifying the position’s minimum and maximum salary in the advertisement.
The law will come into effect from 15 May, 2022.
Let’s take a look at what is this law, why has it been enacted, and how it can affect hiring and salaries in New York City:
What is the new pay transparency law
Under the New York City Human Rights Law it will be unlawful for companies to advertise a “job, promotion, or transfer opportunity” without giving the minimum and maximum salary for the role.
Companies that have fewer than four employees are exempt from the law.
Last year, Connecticut and Nevada enacted a similar pay transparency law, while Rhode Island passed a law that will require employers to provide salary range information under certain conditions.
According to global law firm Gibson Dunn, Colorado enacted a law last year that requires employers to disclose, among other things, the compensation or range of possible compensation in job postings.
Unlike New York City, Colorado makes it compulsory for employers with even one employee to post such salary information in any job postings.
California, Maryland, and Washington also have similar laws requiring salary disclosure, but only upon the request of an applicant or employee.
How it may help job seekers
It has long been seen as workplace etiquette to not discuss salaries, however, it has been changing gradually.
The law is considered to be helpful to employees, especially women and people of colour who generally face pay discrimination.
According to Pew Research Center, women earn 84 per cent of what men earned in 2020.
As per a Business Insider report, data showed that pay transparency law can help women and people of colour achieve pay equity. It may also help with labour shortage which has affected both large and small companies lately.
The Economic Policy Institute (EPI) reported in 2020 that Black men are paid just $0.71 for every dollar paid to white men.
Black women are worse sufferers of pay disparity, according to the National Women’s Law Center, it takes the typical Black woman 19 months to make a white man’s annual earnings in the US.
The EPI found that Black women are paid $0.63 for every dollar paid to white men. This pay gap amounts to a loss of $964,000 to a Black woman over a 40-year career.
The new law may also help employers to retain workers for longer. A UCLA study from 2013 also showed that workers are more productive when salaries are transparent.
With inputs from agencies
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