Posted by Andrea Gonzalez.
The New York City salary transparency law aims to reshape how companies hire new talent. City officials stress that the measure seeks to close gender pay gaps and other disparities by including salary ranges for New-York based and remote roles. The law applies to companies with four or more workers based in New York that must post “good faith” salary ranges for their listings but do not need to include information about stock compensation, bonuses, and potential benefits. The law takes precedence over Colorado, and California recently established transparency measures.
The law, which took effect on November 2, can bring about a wave of belligerent conversations between managers and existing employees about their current salaries, says The Wall Street Journal. Management has resisted sharing salary information because it makes hiring more difficult, creates disruptions among existing employees, and gives competitors a glimpse of a company’s pay structures. Some employers plan to weather contempt by removing job listings from their websites or using other third parties for new talent. The law may affect the access to talent by different companies because people with attractive portfolios will now be able to scrap positions based on salary ranges.
While many New York City-based companies have tried to prevent the law, they are coming to peace with it by highlighting that in some positions, “it is not typical for an individual to be hired at or near the top range,” according to The Wall Street Journal. Furthermore, some of the listings by companies like PricewasterCoopers LLP and CVS show salaries with ranges as wide as three-hundred-thousand dollars at base and maximum at high managerial positions. The measure will further assert the need for Human Resources to train managers to deal with difficult conversations about why employees may not be getting the maximum salary.
To establish the validity of the state measures, lawmakers looked at Executive Order 11246, which states that employees reserve the right to inquire about, discuss, or disclose their own pay or that of other employees or applicants. In contrast, this law applies specifically to all government-funded industries and companies. However, many private corporations are partially government-funded, allowing states and city officials to tap into the salary transparency law.
Andrea is a student at the Stillman School of Business, Seton Hall University, Digital Editor of The Diplomatic Envoy, Class of 2025.