Job seekers and employers see benefits a year into pay transparency law

A year after New York enacted its pay transparency law, experts say it's difficult to measure how effective it has been, even as jobseekers and employers support it.

The state law requires all employers in New York State with four or more employees to post good faith salary ranges or exact hourly pay in all job advertisements.

Advocates who pushed for the law, which went into effect on Sept. 17, 2023, say the law and a similar measure  enacted in New York City in 2022 help to advance the goal of pay equity for women and workers of color.

"One thing to keep in mind is that within a year, it’s kind of difficult to measure the impact quantitatively," said Seher Khawaja, director for economic justice at Legal Momentum, a legal defense and education fund for women based in Manhattan. 

While long-term data is unavailable, early research from January suggests that states that have implemented some form of pay equity legislation — salary history bans or transparency — have seen faster reductions in the gender wage gap, according to data from Syndio, a Seattle-based pay equity software company.

Syndio looked at six states that have implemented pay transparency or restrictions on salary histories in recent years: Illinois, Colorado, Washington, Massachusetts, California and New York. All saw reductions in the gender wage gap, while all but New York and California saw their gap shrink at a faster rate than the nation overall.

New York and California, which already had some of the smallest gaps in the nation, saw a less dramatic shrinking of their pay gaps, according to Syndio's analysis.

"What we’re seeing is the impact it’s had on the women we're speaking with," said Khawaja, whose organization helped shape and push  for pay transparency in New York City and statewide. 

With job seekers able to see the pay ranges of a job, and employers banned since 2020 by the state to ask about previous wages, women — particularly women of color — are in a stronger position when it comes to negotiating salaries, Khawaja said.

"In having access to this type of information about how much an employer is offering for a particular position, it means that they’re no longer negotiating against themselves," Khawaja said. "When previously women were going in to negotiate a salary, they were doing it based on their prior salary, and we know that wasn’t a good starting point." 

Women in New York earned 87.5 cents for every dollar earned by men in 2022, according to figures from the state’s 2024 Gender Wage Gap report compiled by the state Department of Labor. Median annual wages for New York women working full time were $60,900 compared with $69,668 for men in 2022.

The gap for women of color has been larger than for their white female counterparts, historically.

According to the state’s 2024 report, for every dollar earned by a white non-Hispanic man in New York, Hispanic women earned 59.4 cents, while Black women earned 65.4 cents. White women earned 82.7 cents on the dollar, and Asian women earned 84.6 cents.

Lack of enforcement

One of the issues in the state’s transparency laws, experts said, was a lack of enforcement on the part of the state.

The state Department of Labor, which oversees enforcement and compliance of New York’s transparency law, said since its implementation, the agency has received five complaints regarding potential violations. Of those, two employers are still under investigation, one complaint was withdrawn, and two — one against Tadia Orchids NY Inc. and one against Morgan's Brooklyn BBQ — have been brought into compliance, the labor department said. 

To date, the labor department said it had not fined any employers. The labor department said its focus is on compliance and educating employers on the law.

Under the state's law, job seekers who think an employer is violating pay transparency's requirements can file a complaint with the Labor Department. Employers found in violation can be subject to civil fines of up to $1,000 for the first violation, up to $2,000 for a second, and up to $3,000 for a third and subsequent violations.

In New York City, where the city's Commission on Human Rights has overseen pay transparency and its enforcement longer than the state, more actions against employers have been taken.

Between July 2023 and June 2024, the city's Commission on Human Rights said it filed 50 claims of alleged pay transparency violations, and received 249 inquiries and tips from the public regarding potential violations. Between July 2022 through June 2023, the commission filed 11 claims, but received more than 600 inquiries from the public.

"We're happy that New Yorkers are reporting what they're seeing. We want to work toward a place where it's not happening," said Jose Rios Lua, chief of staff for the commission. "There are real consequences to violating the law."

The commission, which conducts unprompted surveys of employers' online job ads, has filed 32 formal complaints of its own since 2023. Employers cited in the complaints include Tesla and News Corporation, which allegedly posted salary ranges that "were not made in good faith."

Last June, Tesla had an opening for a construction project manager posted on its career site that had a listed range of $72,000 to $210,000, according to commission records. News Corp., which owns The Wall Street Journal and The New York Post, had a listing up in July 2023 for an education reporter offering a range of $50,000 to $180,000.

The overwhelming majority of complaints filed by the commission have dealt with employers who posted no salary ranges in job ads.

The city's human rights law allows the commission to fine violators up to $250,000 for instances of discrimination, which violations of pay transparency fall under, in addition to ordering policy changes at employers to bring them into compliance. Rios Lua said there were no public settlements to indicate employers had been fined.

Mindset of employers

Job seeker Israel Maldonado, 63, of Oceanside, said the pay transparency policy had been a great law for those looking for work, even if it hadn’t made finding employment notably easier.

With wage information readily available, it’s easier to know where the employer’s "mindset is in terms of what they’re willing to pay for employees, or what they wish to be paying for employees," said Maldonado, who has 10 years’ experience in human resources.

That information makes it easier to negotiate as a job applicant, he said. At the same time, he’s noticed a pattern of employers asking for more experience than a salary range might support.

"The job requirements are extensive, and very often even though there’s a salary range, the range is kind of low," he said. "There has to be a reality check because at the end of the day we know what we’re experiencing here in terms of the cost of living."

Hiring streamlined

Nicholas Melito, labor and employment lawyer with Meltzer, Lippe, Goldstein & Breitstone LLP in Mineola, said the change for employers largely has been seamless since last year's rollout.

"In my experiences speaking with clients on Long Island, I think overall it’s been positive," Melito said. Many employers have been taking a careful look at their existing payrolls to make sure, he said. "Obviously, there was a lot of questions at first, but there’s not been a lot of pushback."

Because job seekers know their base pay in advance, employers can expect that applicants are at least comfortable with initial offers. "If you're not wasting their time, they're not wasting your time," Melito said.

Additionally, the law doesn't prohibit employers from offering a candidate more pay than stated in a job positing, so hiring managers can still negotiate to attract an exceptional candidate. 

"I think it’s helped streamline the hiring process and helped with getting the right candidates in the roles," he said. "If you like the candidate, then all you have to figure out is where in that range they fall."

Focus on the right opportunities

Nicole Jeanty, an Elmont resident who started looking for work as an accountant or medical technician nine months ago after being forced out of retirement for financial reasons, said any advantage a job seeker could get in today's market was a necessity. 

"I can see there are opportunities out there," Jeanty said. "But … you are applying and in your mind really don’t know if your résumé is getting through or not."

Knowing what employers are offering up front, Jeanty said, helps her organize her job hunt more efficiently, and provides a little more leverage in interviews. 

"There's a certain range that I’ll agree to and there's another range that I'm not taking," she said. "I spent so much time going to school, so I'm not willing to take anything for the sake of working."

At the same time, Jeanty is skeptical about some of the higher-wage rates some employers promote, she said.

Change in hiring practices

Domenique Camacho Moran, labor and employment attorney and partner at Farrell Fritz in Uniondale, said the new law had pushed employers to change the way they made decisions on wages, not just for prospective employees but existing workers, too. 

"Most employers that we work with have engaged in a routine practice around job posting and salary ranges in a way that is new and different," Moran said. "Historically, while employers had a sense of what they were willing to pay, the ultimate decision on how much a candidate was going to be offered depended on the candidate."

"Now employers are, because of the law, considering in advance what the job is worth and establishing a range," Moran said. "For most employers, that means looking at what they pay other people to do the job or do similar jobs."

While that kind of self-auditing is good practice, she said, she's heard some employers share concerns about the impact pay transparency has on business competition. 

"One of the perhaps less-positive impacts of the law is competitors know what you're paying people, at least in general," she said.

Getting the right workers quickly

For Northwell Health, the largest private employer in New York State, transparency in job ads helps speed up the hiring process, meaning in-demand, patient-facing positions are filled as soon as possible. 

"It really does help us to get the right people in our critical roles quickly because it helps to streamline hiring," said Stacey Rapacki, vice president of compensation strategy at Northwell.

"It really does help to remove the barriers around pay expectations," she said. "Our candidates know what to expect, and it helps them to self-select for the roles."

When New York City implemented pay transparency, Northwell instituted transparency for all postings throughout the state, Rapacki said. Prior to the pandemic, the health care provider was already trying to change its framework for hiring to make the process as efficient as possible. 

Rapacki said in addition to helping reduce barriers for diverse job applicants, having pay information front and center could give existing employees an idea of what kinds of jobs they'd like to strive for in the future. 

"It really helps to support career mobility and advancement," she said.