NYC Pay Transparency is Here: A Guide for Your Job Postings
By: Chris DeCola
It’s that time of year again – the weather is getting colder, I’ve had at least two pumpkin spice lattes, and the faint whispers of annual planning and performance reviews are growing louder and louder. But in addition to the normal rhythm of end-of-year processes, this fall season comes with the added to-do of complying with NYC’s new pay transparency law.
As an HR and Compensation Consultant at Gray Scalable, I regularly help leaders define and communicate their compensation strategies. As part of this work, I’ve had a front-row seat to the concerns, goals, and philosophies of many different leadership teams, and am well-versed in the reality of what happens when a company starts to go “on the record” about how it pays. Below is some of the information that I’ve been sharing with my clients to guide them through this process.
A quick note: I am coming at this from an HR & comp planning perspective and my thoughts below reflect only that. If you have concerns about legal or compliance issues, you should talk to an employment attorney directly.
What does NYC’s Transparency Law require?
At a high level, effective November 1, 2022, employers with four or more workers, and with at least one worker in New York City, are required to post a salary range for any job within the City or that could be performed remotely by someone living in NYC. The last bit is really important for hybrid and remote hiring environments – it means that even if you aren’t primarily hiring the role out of NYC, if you are open to candidates in the NYC area, you must post a salary range for the role.
The salary range must include the lowest and highest salaries or hourly rates that the employer believes that it would reasonably pay (“in good faith”) for the job, promotion, or transfer, at the time of the posting. The law only requires you to share individual salary ranges in job postings, so you do not have to share the ranges for all roles internally with your team.
What does it mean for your organization?
It means that effective November 1, 2022, you must post the salary range for all roles that you are currently hiring for in NYC or that can be performed remotely by an NYC resident. It also means that you likely have some work to do internally, as you’ll need to solidify your existing compensation practices and manage the expectations of your employees.
In an ideal world, all of your employees already have a deep understanding of your compensation philosophy and pay strategies, understand how different factors like job function or geography impact your pay ranges, know how levels are structured at your company, and have been walked through how their mix of tenure, performance, and experience all factor into their compensation.
I don’t know about you, but I do not live in this ideal world. I instead live in one where employers are well-intentioned and employees are curious, and where compensation has been a black box for so long that everyone’s a little bit confused about how to best move forward.
Even if you are not in a position to communicate your full compensation philosophy to staff, there is some information that you can share with your managers and employees to help them understand how you pay and how the salary ranges in your job descriptions came to fruition. Consider sharing:
- Information about the law itself (when it goes into effect, what is required, etc.);
- What data you used to form your salary ranges and any decisions you made as part of that process (e.g. did you use a dataset from your VC or a market comp provider, did you decide to have different ranges for people who live in different parts of the country, do different job functions have different ranges, etc.);
- How decisions are made about where someone’s compensation sits within their relevant salary range; and
- How managers should answer some common questions about their employees’ compensation (e.g. “why aren’t I paid at the top of my range?”). For more information on this one, check out this blog post.
What should you consider putting in your job descriptions?
There are a handful of decisions to make about what information to share and how you want to share it. Some broader topics to consider addressing are:
- What ranges to use: If you only have one set of ranges, those are the salary ranges you should use. However, some organizations have salary ranges for hiring/headcount budgeting purposes that sit within broader salary ranges for each level. Hiring ranges are often condensed and take into account what an organization can afford to pay for a role and what peers are making to ensure internal equity. Organizations can choose to use their hiring ranges in lieu of the full level’s salary range so long as the posted range represents what you expect to pay for the open role.
- How to talk about different locations: By law, you are required to post the salary range that you would pay in good faith for a role that is based in NYC or could be performed remotely in NYC. In the case of remote roles, you need to decide how you want to handle the situation where you post the NYC range but hire someone in a different location (who might have expectations of the higher NYC range). Some companies may choose to share multiple ranges for different locations or may simply state that the range is only for NYC-based roles.
The words that accompany your salary range numbers are important too. You’ll want to include some additional context for candidates reading your job description so they understand a bit more about your compensation strategies. See below for some sample language you can adapt for your organization:
“The minimum annual salary for this position is $50,000 and the maximum is $75,000. The salary range for performing this role outside of New York City will differ. Additionally, you will be eligible to participate in our company’s equity program, plus our robust medical, dental, vision, retirement, and other benefits.”
“(NYC only*) Minimum Salary of $50,000 - $75,000 + annual bonus + equity + benefits.
*Disclosure as required by S9427A of the minimum and maximum salary compensation range for this role when being hired into our offices in NYC or being performed remotely in NYC.”
“For NYC-based roles: Minimum annual salary of $50,000 and maximum annual salary of $75,000. You may also be offered a bonus, equity grant, and benefits.
Please note this role is open to candidates outside of New York City as well. The information below is provided for those hired in NYC only.
If you are a New York City applicant:
- The estimated pay range for this role, based in New York City, is $50,000 - $75,000.
- This role will be eligible to participate in our company's annual bonus program and equity program
Our salary ranges are based on paying competitively for our size and industry, and are one part of many compensation, benefits and other reward opportunities we provide.
Individual pay rate decisions are based on a number of factors, including qualifications for the role, experience level, skill set, and balancing internal equity relative to peers at the company.
The range above is for the expectations as laid out in the job description, however we are often open to a wide variety of profiles, and recognize that the person we hire may be less experienced (or more senior) than this job description as posted. If that ends up being the case, the updated salary range will be communicated to you as a candidate.”
If you do not factor location into your salary ranges:
“The base salary for this role is between $50,000 and $75,000, depending on skill set and experience level. Our compensation program is geographically-neutral, meaning that we do not adjust our pay ranges based on where you live, so this salary range applies to all candidates.”
How does this work for a sales role?
“For NYC-based roles: The base salary range for this role is $50,000 - $55,000. You will also participate in our company’s Sales Incentive Plan, and should you achieve your goals, the OTE for this role will be between $100,000 - $110,000.”
Is there anything else to consider?
Wage transparency laws are continuing to pick up steam across the US and for good reason - they are aimed at addressing and reducing the wage gaps experienced by underrepresented folks, especially women of color. Several states have already enacted them, have amended existing laws to provide greater transparency for employees and job seekers, or have passed new laws that will go into effect next year.
I think this should be a moment of reflection for all employers, especially in the tech community, to take stock of their compensation philosophy (does the organization have one, is it where it needs to be as the organization has evolved), their compensation structures (are they easy to understand, use, and talk about), and their approach to communicating about pay within and outside of the walls of their organizations.
The longstanding idea that compensation information is for “HR and Leadership’s eyes only” is quickly becoming a thing of the past. Equipping your managers with the important skill of effectively talking about pay, and giving your employees the foundational knowledge of how pay works and what to expect, will reap incredible dividends for your organization (and for your employees) in the future.
If you’d like help with your compensation program or how to talk about compensation with your organization, feel free to reach out to my team at Gray Scalable here!
Gray Scalable is partnering with the compliance training experts at Ethena to host a virtual panel on November 15 at 1pm EST, where we'll share advice and best practices to make sure your company is set up for success when it comes to the new salary transparency laws. Register today!