Beginning on May 15, 2022, employers in New York City must begin listing salary ranges in any advertisements for jobs, promotions, or transfer opportunities. The new measure is the latest in a nationwide trend of state and local laws designed to promote pay equity by increasing employee bargaining power in pay negotiations.

Under the new law, any employer with more than four employees in New York City commits an “unlawful discriminatory practice” if it advertises a job, promotion, or transfer opportunity without stating the minimum and maximum salary for that position in the advertisement. Notably, independent contractors are included in the calculation of whether an employer meets the four-employee threshold. The employer must list a salary range extending from the “lowest to the highest salary the employer in good faith believes at the time of the posting it would pay” for the advertised job. The disclosure requirement does not apply to temporary staffing firms. Under the New York City Human Rights Act, the penalties for violations are hefty, as the city can impose a civil monetary penalty of up to $125,000 per violation, or $250,000 for violations that result from an employer’s willful, wanton, or malicious action.

The law does not define or specify what types of communications regarding open positions qualify as advertisements. Based on the inclusion of advertisements for promotion or transfer opportunities, it appears that the disclosure requirement applies to internal listings as well as advertisements to the public. In addition, the law requires disclosure of a “salary” range, but does not specify what if any additional disclosure must be made of non-salary compensation like commissions, bonuses, and stock or other equity awards.

With the new requirement, New York City joins Colorado in requiring pay disclosures in job advertisements. Several other states, including Connecticut, Nevada, California, Maryland, and Washington have similar laws requiring employers to provide certain disclosures in response to an employee’s request. Other states are currently considering similar bills.

This growing nationwide trend underscores the need for employers to review their recruiting and onboarding processes. In addition, the disclosure of salary ranges could lead to pay discrimination claims from employees who discover they fall at the bottom end of an employer’s range. Accordingly, when employers assess the salary range they will include in any public or internal advertisement, they should also consider auditing the compensation of existing employees in the position to ensure that any disparities in pay are justified by legitimate and objectively-identifiable differences in the employees’ positions or backgrounds.