Dive Brief:
- The next iteration of the New York City pay transparency law that has companies even outside the city scrambling to meet could make it illegal to publicize a salary range in which the maximum is double the minimum, The Wall Street Journal reports.
- “There may be additional legislation ‘soonish’ to address the fact that there are overly broad ranges,” the Journal said.
- That means a job for which the salary range is, say, $60,000 to $120,000 would be unacceptable.
Dive Insight:
Lawmakers are thinking about tightening pay ranges because companies, since the law took effect in November, have been publicizing ranges that are so extreme that critics question whether they’re making a good-faith effort to comply.
“Salary ranges [are] so wide they stretch hundreds of thousands of dollars,” the Journal reported.
A trauma surgeon in the Mount Sinai Health System, for example, could earn anywhere from $384,000 to more than $800,000, and a tax analyst at PwC could earn $158,000 or nearly triple that, the Journal said.
These ranges wouldn’t be legal if the law changes in the way that’s being considered. The goal behind requiring employers to publicize pay ranges for jobs they’re hiring for is to promote pay equity.
Broad impact
Although the law applies only to New York City, its impact extends beyond the city because any employer, no matter where they’re located, must comply if they have at least four employees, one of whom is based in New York City and the company advertises for workers in the city.
Other jurisdictions have passed, or are close to passing, their own pay transparency laws, making it increasingly hard for any employer, no matter where they are, to seek job candidates without offering pay transparency given the way so many jobs can be done remotely.
Companies have complained that pay transparency makes job searches more difficult because no two candidates bring the exact same skill and experience to the mix.
Andrew Turnbull, an attorney in the Washington, D.C., office of Morrison Foerster, told Legal Dive that companies can help protect themselves by coming up with objective criteria for justifying a pay range.
That means being concrete about why someone with less experience or without certain skills would earn something less than someone with more experience or with certain skills.
Given the limitation that NYC lawmakers are contemplating, it could be an appropriate risk-management strategy to also keep your range within the minimum-maximum standard.
“The tentacles of this law can be broader than in any other jurisdictions,” Turnbull said.
