Clarity is coming for jobseekers in some states as new laws go into effect requiring certain employers to provide salary ranges to candidates in the job posting or during the interview or salary negotiation process.
For many employees, open discussion of salary is already protected by law. Under the National Labor Relations Act, covered employees have the right to communicate with other employees at their workplace about their wages. However, some companies have specific policies that prohibit employees from discussing pay during working hours or while using company devices or company communication platforms (i.e., social media). And some employees find talking about pay and benefits uncomfortable.
But information can be powerful, especially salary information. Building upon salary research from third-party sites like Salary.com, Glassdoor.com, and similar sites (including industry-specific websites), some jobseekers will now have access to company-provided data about pay ranges. Jobseekers have traditionally been advised to request a salary range from a prospective employer, but now this information is required by law to be given to them in some jurisdictions.
One of the most significant outcomes from the legislation is the potential to standardize compensation, especially for new hires versus longtime employees.
A survey from Indeed.com found that a full 75 percent of jobseekers say they are more likely to apply for a job if the posting includes a salary range.
The majority of jobseekers that I speak with regularly are located in New Jersey, New York, and Pennsylvania. While this post focuses on the locations we get questions from most often, there are pay transparency laws in other states, too. Pay transparency initiatives —wage disclosure requirements, bans on requesting salary history, etc. can be found on the Pay Equity Map (https://www.fisherphillips.com/pay-equity-map/index.html) we’ll also cover laws other states have enacted in a future post.
Pay transparency rules for New Jersey, New York, and Pennsylvania
Numerous states have passed laws affecting employers’ requirements to provide wage and salary ranges, disclosure of applicant’s salary history, and/or pay equity among genders. In addition, certain cities have specific laws related to salary transparency and/or pay equity. Here is a summary of the relevant legislation in New Jersey, New York, and Pennsylvania (as of October 2022):
New Jersey (New Jersey Statute Section 34:6B-20)
Effective January 1, 2020, employers in New Jersey are prohibited from screening job applicants on the basis of the applicant’s salary history (including, but not limited to, prior wages, salaries, or benefits). Employers may consider salary history when determining compensation only if the applicant voluntarily provided the information (without employer prompting or coercion). In addition, an applicant’s refusal to volunteer compensation information cannot be considered when deciding whether to make an offer of employment. An employer may request that an applicant provide the employer with a written authorization to confirm salary history (including, but not limited to, the applicant’s compensation and benefits) after an offer of employment (that includes an explanation of the overall compensation package) has been made to the applicant.
Employers who share salary information with other potential employers without the express consent of the applicant can be subject to civil penalties of $1,000 for a first violation, $5,000 for a second violation, and $10,000 for each subsequent violation.
Jersey City, NJ (Ordinance No. 22-045)
Effective (as amended) June 15, 2022, covered employers, employment agencies, and agents of covered employers (those with five or more employees within Jersey City, including counting independent contractors towards the employee threshold) must provide a minimum and maximum salary range and benefits in every job posting or advertisement, whether the job posting or notice is in print or digital form.
In addition, it is unlawful for employers to screen a job applicant based on the applicant’s salary history or require that the applicant’s salary history satisfy any minimum or maximum criteria.
Violations are subject to fines of up to $2,000.
New York State (S9427) – Not Yet Signed Into Law
Lawmakers in New York State passed a bill in June 2022 requiring private-sector employers to disclose the compensation or range of compensation in any advertisement for a job, promotion, or transfer opportunity. The governor (as of September 2022) has not yet signed the bill into law, and it would go into effect 270 days after signing. Once enacted, employers must provide a job description for the role, if one exists. Most important is that the statute states that it applies to any jobs that can or will be performed (at least in part) in the state — meaning that it can potentially be applied to remote job positions. Employers who fail to comply with the statute can be fined up to $3,000.
New York, NY – “New York City Pay Transparency Law” (Local Law No. 59, Int. 0134-A)
Starting November 1, 2022, companies that perform work in New York City must include salary ranges (“minimum and maximum salary information”) in job postings.
Employers must provide “a good faith salary range for every job, promotion, and transfer opportunity advertised,” according to the City’s Commission on Human Rights. Temporary help firms advertising jobs for temporary employment are exempted from the requirement.
Companies face fines of up to $250,000 for noncompliance after a first offense (the fine for a first offense is zero, and employers have 30 days to correct the deficiency). Only current employees can sue the employer for posting a job, promotion, or transfer without posting a minimum and maximum hourly wage or annual salary.
Westchester County, NY (Westchester County Local Law No. 119)
Starting November 6, 2022, employers with at least four employees are prohibited from advertising a position (or promotion or transfer) without including a salary range. The law applies to positions that are performed in whole or in part in Westchester County (in person or remotely). Violations are subject to penalties of up to $250,000.
Philadelphia, PA – “The Philadelphia Wage Equity Ordinance” (Philadelphia Commission on Human Relations, Regulation No. 7)
This law, effective September 1, 2020, makes it illegal for employers with one or more employees doing business in the city of Philadelphia, employment agencies, or their agents to ask applicants for current or prior salary history during the application or hiring process. It applies for positions located in Philadelphia (regardless of where the employer is headquartered). In addition, employers cannot retaliate against an applicant for refusing to provide salary history.
The law does not prohibit employers from asking applicants about their “salary expectations.”
Applicants reporting violations of the Wage Equity Ordinance to the Philadelphia Commission on Human relations may be awarded compensatory damages, punitive damages, reasonable attorneys’ fees, costs, or “other appropriate relief” if the complaint is substantiated.
I am not a lawyer, and don’t play one on the Web. In other words, this information is provided for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.