For as long as paid work has existed, wage comparisons have been a source of emulation for some and a source of great frustration for others.
At the end of 2022, New-York City is changing the rules of the game. As of November 1, 2022, all employers in this megalopolis must mention on all recruitment advertisements, the range of salaries practiced within their workforce.
This new rule will be a real asset in salary negotiations for new entrants. It will also most certainly provoke passionate debates between employers and their current employees who feel they are underpaid in relation to this benchmark.
Until now, platforms like Glassdoor offered a glimpse of job market trends without guaranteeing complete transparency and completeness about the companies listed. From this fall on, things are getting a little clearer.
The expected impact of this law goes far beyond NYC alone. New remote working methods offer companies the opportunity to recruit talent from distant states. There is a real opportunity for this transparency to extend to the entire country.
The benefit of this seemingly virtuous law, however, seems to have two potential counterpoints.
- The first could affect companies located in cities less fortunate than New York. Would these employers be able to compete with the salaries offered for similar positions by New York companies? People looking for work in jobs that can be done remotely may indeed turn to the best paying company at the risk of abandoning small local businesses.
- The second potentially negative aspect of this reform would be that, in order to stop wage growth stimulated by this transparency, large companies in certain sectors of activity agree among themselves on salary ranges.
In spite of this, it is easy to understand the purpose of this law, which aims at reducing salary inequalities, whether they are related to the employee’s gender, ethnic origin, etc.
In order to ensure that this new law is applied quickly and effectively by companies hiring employees in New York City, the legislator has decided to introduce fines of up to $250,000 per violation. However, there is a tolerance with no penalties if the violation is corrected within 30 days of the authorities’ notification of the non-compliance.
At ORCOM, we believe in the expected benefits of this reform on the American labor market. Our expertise in reporting issues can help you comply with these new rules.
