New York’s Pay Transparency Act gets off to a bad start

By Jennifer Liu CNBC

Starting Tuesday, companies that hire workers in New York must list the minimum and maximum wage range for a job in any print or online publication.

Proponents say companies have been waiting a long time to become more transparent about their compensation practices. Workers hope this will give them more leverage to discuss and negotiate their pay. And the main purpose of the law is to help close the wage gap.

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But as job postings began to appear this week, New Yorkers began to criticize some companies for posting extremely wide job openings: from $50,000 to $145,000 for a vacant journalist position, from $125,800 to $211,300 for a senior technical writer, from $106,000 to $241,000 for a post of General Counsel.

In one instance, Citigroup listed multiple jobs ranging from $0 million to $2 million, reports the Gothamist.

A Citigroup representative told Gothamist that it has since updated its ranges and that the wide range was an error caused by a computer glitch.

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However, a job posting for a customer service position listed a salary range of $61,710 to $155,290 on Wednesday, but was removed. A Citi representative told CNBC that the company “proactively reviews all job postings to ensure the correct salary range is included.”

The publication error highlights the many ways companies can still circumvent the new pay transparency law, intentionally or unintentionally.

Employers are testing what it means to list a “good faith” range.

The law specifically states that companies hiring in New York must post a “good faith pay scale” for each job opportunity, promotion or transfer.

A “good faith” range is one that the employer “honestly believes at the time the job advertisement is posted that they are prepared to pay the selected candidates”, says the Commission on Human Rights of the New York City, which enforces the law. .

Companies may need to offer a wide range if they’re open to people with different levels of experience and to compete in a tight hiring market, says Domenique Camacho Moran, a New York attorney at Farrell Fritz.

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A common strategy for businesses is to come up with a target budget for a job posting and go 20% below and above that point, adds Tony Guadagni, senior director of research at consultancy Gartner.

But a range over $100,000 could be a mistake or a sign that “what an organization is willing to pay for a job can vary widely,” Guadagni says.

A view of New York.
A view of New York.Getty Images

“It’s hard to imagine that the two agencies tasked with investigating potential violations of the new law, the city’s Human Rights Commission and the city’s Bureau of Law Enforcement, would consider in good faith an assignment comprising a minimum salary of $30,000 and a maximum of $300,000. representation of the salary range,” he adds. But it’s up to investigators to show that a pay scale is not bona fide, not up to companies to prove that it is.

A salary range of $90,000, like the one Citi listed in the edited post that was later deleted, is still “extremely broad” and “raises the question of whether this is a good faith effort.” “, says Beverly Neufeld, president of PowHer New York.

Similarly, wide ranges could misrepresent the company’s respect for workers, says Neufeld: “It says a lot about companies when they use potential loopholes. The spirit of the law is to create transparency, and any company that has large pay scales like that is not creating any transparency.”

Eliminate jobs

By law, employers must post the minimum and maximum salary offered for a particular position when it is listed on an internal job board, as well as on external sites such as LinkedIn, Glassdoor, Indeed, and others. job search platforms. It also applies to any written job description that is printed in a brochure, distributed at a job fair or submitted to newspaper classified ads.

In response, some companies may stop posting jobs altogether and instead rely on other means of recruiting and hiring.

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Some companies may choose to remove job postings and encourage applicants to send their resumes to a general email address, reports the Wall Street Journal. Others may take advantage of employee search companies to find candidates on their behalf, instead of posting a job ad and having to post the compensation ranking themselves.

Employers could also avoid compliance if they hire remote workers but say the work can’t be done from New York. This happened in Colorado, where a similar law went into effect in January 2021. The state’s labor department sent hundreds of employers a warning to comply with the law and, in July, had fined three companies for non-compliance.

Camacho Moran rejects the idea that companies are deliberately trying to circumvent compliance because doing so could result in legal action that would cost the employer time and money.

In New York, if a company fails to comply with the new law, job seekers and workers can file complaints or leave an anonymous review with the city’s Human Rights Commission. Companies will have 30 days to correct the violation, or they could face civil penalties of up to $250,000.

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Despite the uneven enforcement so far, Neufeld is optimistic companies will continue to beef up their pay scales with the help of the public account and law enforcement.

The consequences of the law could be beneficial for both employers and employees. Job seekers are overwhelmingly in favor of pay transparency, with more than half saying they wouldn’t apply for a job or company if the salary wasn’t listed, Monster data shows. .com. The paid list could end up being a good recruiting tool.

“It will take some time for people to comply,” says Neufeld, but “over time companies will realize that this is a benefit, not a penalty,” he said. he declares.

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