Pay transparency transformed the way New York companies discuss salaries. New York State’s Pay Transparency Law, which took effect in 2023, has since become a powerful tool in promoting fairness. It significantly challenges pay gaps, particularly for women and minorities.
The law obligates employers to list salary ranges for jobs, promotion or transfer opportunities. This promotes good faith efforts among employers and allows job seekers to make financially informed decisions.
Tips for drafting a legally compliant pay range
Employers must learn how to draft a pay range under the law. The New York State Department of Labor shares easy-to-follow tips for those who aren’t sure where to start:
- Always include both the lowest and highest pay amount. This can be in yearly salary or hourly rate.
- Be honest about what you think you’ll actually pay.
- If you plan to pay a single fixed rate, list that amount.
- Don’t use open-ended ranges. For example, “$20-plus an hour” isn’t allowed.
- Only include salary in the pay range. You can mention other benefits such as insurance, vacation time or retirement savings separately if you want to.
- Say it clearly in your ad if the job is paid only by commission.
- Try to figure out a fair pay range.
This change also encourages employers to review existing pay structures. Uncompetitive salaries can prompt employee turnover.
Adapting to the rule
Employers can explore several ways to avoid potential legal challenges. One of them is accomplishing an equity audit to find and fix pay gaps in the company. This helps ensure pay practices remain fair, competitive and consistent.
They can also discuss the law with the hiring team and devise ways to encourage open salary discussions in interviews. This can include a plan for explaining the company’s pay philosophy to employees.
Embracing pay transparency
Pay transparency may present challenges, but it also offers employers opportunities. One of the biggest potential gains is attracting top talent. It also improves retention by fostering trust, improving brand reputation and uniting teams.
Transparent pay practices can lead to a more engaged, loyal and productive workforce. When developing one’s specific to the company’s needs, consulting an employment law attorney is advisable to ensure they meet legal requirements.
Keeping up with evolving employment regulations isn’t just a matter of survival. It determines whether a business and its employees can thrive for years to come.
