New Salary Transparency Laws
Here’s why your healthcare practice may need to list salary ranges and hourly pay rates as part of your job postings.
You may have heard the big news: many states and local governments now mandate that employers include salary ranges in job postings. But what do these new laws require, and how can you prepare? We will dive into California’s and New York City’s recent legislation and outline what it requires of business owners, the consequences for non-compliance, and proposed action steps for your practice.
California Salary Transparency
Governor Gavin Newsom signed legislation that became effective in January of 2023. The new law requires employers to include a reasonable salary range or hourly wage estimate in all job advertisements. Notably, this law applies to employers with 15 or more employees. Thus, if you have a small- to medium-sized practice in California, you must keep this rule in mind as your business grows.
Additionally, employers must provide the pay scale to any applicant applying for an open position if they make a reasonable request. Under the statute, employers must also provide current employees with the pay scale for their positions. These two requirements apply to all employers in California, no matter the size of the business or the number of employees.
Non-compliance can bring significant financial penalties for a practice. A person who claims to be aggrieved by a violation of this law may file a complaint with California’s Labor Commission. The aggrieved party has a whole year to make such a complaint or bring a civil action against the employer. If the Labor Commissioner initiates an investigation and determines that an employer violated the pay scale posting requirements, the Commissioner may issue a fine for each individual instance of the violation. Fines can range anywhere from $100 to $10,000 per violation. Moreover, if employers fail to keep records regarding pay scales, the Commissioner will consider the lack of documentation as a fact favorable to the aggrieved party’s violation claim.
New York City Salary Transparency
The New York City Administrative Code was amended in November 2022, requiring employers to share base salary or hourly wage ranges. Essentially, New York City employers must provide a good-faith estimate of the minimum and maximum pay scale when an open position is posted publicly or to internal candidates.
The New York City requirement applies to employers with four or more workforce members where at least one worker is based in New York City. Thus, this requirement applies to all but the smallest healthcare practices. Unlike California’s statute, the amended New York City code does not require employers to provide pay scales to current employees.
As with California’s new salary requirements, non-compliance can create severe financial burdens. If someone sends in a tip that you have violated the code, both the Commission of Human Rights and the Law Enforcement Bureau may choose to open an investigation. The first time an employer violates the code, they can show “proof of cure” to the New York City Commission on Human Rights within 30 days of the violation. If done successfully, the Commission may choose to waive the first fine. However, this workaround only applies to the first violation.
Subsequent violations of the salary posting requirements can elicit fines of up to $250,000. In addition, employers found in violation of the code may have to pay damages to affected individuals, create new internal policies to prevent the matter from happening again, revise their job postings, and engage in additional forms of relief.
How to Protect Your Practice
If you are located in California or have employees in New York City, the requirements described above may apply to you. However, even if they don’t, there may be benefits to including salary expectations as part of your job postings and advertisements.
It’s worth noting that ethical requirements for healthcare providers usually require continued compliance with state and local laws. Thus, non-compliance creates potentially severe financial risk and the risk of disciplinary action from a state licensing or ethical board.
Working with an attorney to assist with hiring can help ensure compliance with this new regulatory landscape. The attorneys at Jackson LLP can assist with everything from reviewing job postings for state and local compliance, writing offer letters, drafting your healthcare and administrative employment contracts, and preparing your workforce policies (i.e., your employee handbook).
Working with a healthcare attorney familiar with employment law and healthcare requirements may be critical to your practice operations in a field already burdened with regulatory requirements related to patient privacy, insurance, and ethical standards.
Get Legal Help
Are you an employer who needs assistance ensuring your job postings comply with local law? Or perhaps you have received notice from a state or local agency alleging a violation of salary range advertising requirements? If you operate in one of the states where we practice, set up a free consultation call to discuss how we may assist you.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader and should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.