Businesses in New York City will now be legally obliged to list salary ranges in job advertisements.
The law, which came into effect on Tuesday, requires employers to list the minimum and maximum salary (or hourly wage) for advertised positions.
Here’s what you need to know.
Businesses would have to disclose “in good faith” what they believe it would pay for the advertised job, promotion or transfer opportunity at the time it is posted.
Businesses that fail to include salary ranges won’t initially be subject to a fine. They will instead have 30 days to include payment information in their advertisement, which must then be signed off by an NYC Council commission.
Why does it matter?
Laws targeted at salary transparency have been viewed as a way to evaluate and address gender and racial pay gaps.
Speaker of the NYC Council, Adrienne Adams, called the new law a “pivotal step” towards pay equity, saying that “addressing pay inequities that have long impacted our diverse communities and workforce is critical to both our economy and gender and racial justice”.
Laws targeting salary transparency have also been passed in the U.S. states of California, Washington, Colorado, Connecticut, and Nevada.
The legislation that passed in California also required businesses to keep records of each employee’s salary history while in the job, and for three years after they’ve left. This is to determine any patterns of wage discrepancy.