Leadership   //   December 9, 2022  ■  4 min read

Employment lawyers chip in on New York City’s ‘good faith’ pay transparency law

A weekend editor at the Wall Street Journal is compensated anywhere between $50,000 and $180,000. A senior copywriter at Deloitte has a current range of $64,935 to $133,330 – what they call a “reasonable estimate” in the job description. An associate at KPMG could be compensated anywhere between $58,900 and $103,200. For a job as a senior technical writer at Amazon Web Services, the pay ranges from $125,800 to $211,300, which they say depends on geographical markets. 

If you’ve been job searching in New York City lately, it’s easy to see that the pattern continues. The law went into effect in November, which enables four million private-sector workers to see the salary range on all job postings. It was landmark legislation that coincided with a wave of other pay transparency movements across the country.

However, over a month later, job seekers are questioning whether or not it’s been helpful.

The law is intended to help close the racial and gender wage gap, but some workplace experts are concerned that companies aren’t putting their best foot forward. 

“Salary transparency has the opportunity to either be a trust gainer or a trust loser for potential employers to earn with job seekers,” Robert Boersma, vp of operations at Talent.com told WorkLife in November. “It’s not useful for anyone to see a range from $50 to $1,000 an hour. You can create employee trust right off the bat by having a range that is more reasonable, and job seekers are going to see that.”

However, in the eyes of the law, these large ranges could potentially hold up in court. The NYC law uses the language that it should be a “good faith” salary range. The guidance defines “good faith” as the salary range the employer “honestly believes at the time they are listing the job advertisement that they are willing to pay the successful applicant(s).” 

“I am never a fan of phrases like ‘good faith’ in legislation because I always see that as an invitation for litigation,” said Domenique Camacho Moran, partner at Farrell Fritz who represents employers from startups to large corporations. “One of the challenges is what does good faith mean? What I know for sure is that employers are asking and we are advising that good faith depends on your organization.”

She said her firm encourages employers to look at a variety of factors to develop the pay range. For example, an employer that exercises good faith might be looking at variables like how many people are in the position currently, what was their starting salary, their current salary and the current labor market.

One key thing employers are considering when putting together a pay range is the level of experience they are looking for. It could be one of the best explainers for a large difference in the lowest and highest numbers. Say an employer is looking for a director role to be filled and the salary range has a difference of $100,000, someone who only has a couple of years of experience and hasn’t yet been at a reputable company, they might be on the lower end. If the next candidate has 15 years of experience and has worked at one of the most notable companies, they would be on the higher end. 

Christopher Davis, an employment lawyer and founding partner at The Law Office of Christopher Q. Davis, agrees that the law is quite broad. “It’s pretty easy to manipulate and difficult to regulate,” he said. Davis said he’s also concerned about employers using a large range as a loophole to not put in the work to figure out a more accurate, smaller range.

Although he hasn’t seen any litigation yet, he doesn’t think that the statutes are thoughtful or practical. Camacho Moran says that the “good faith” language can end up being an invitation for litigation down the road. In most cases, whether or not the salary range is in good faith will depend on the specific situation. 

“The issue of pay transparency and equal pay is important,” said Davis. “But they are also case specific.”

Felice Ekleman, attorney at law at Jackson Lewis P.C., who focuses on employment and labor, says in one situation a $100,000 difference might be good faith, but not in others.

“It really depends on the employer, the position, how the position is paid,” said Ekleman. “Our advice is to be thoughtful in terms of posting the information. If you’re not ready to be transparent, then there is some work to do internally.”

Businesses that fail to follow the salary transparency law face potential action by the city’s human rights commission, which can find employers a maximum of $250,000 per violation. There is one free pass on the first violation if they fix the problem within 30 days.

“We’ll see how this plays out. It’s still really new,” said Ekleman. “To eradicate pay equity is going to take work on a lot of different levels.”