NYC pay transparency law will spur demands for raises across the country: experts

A New York City wage transparency law that takes effect next month is likely to trigger a nationwide wave of worker demands for wage increases, experts told The Post.

Starting Nov. 1, employers hiring in New York City will be required to include minimum and maximum wages in every job listing — from $15-an-hour dishwasher jobs to seven-figure tech and finance jobs.

The law is intended to help job seekers avoid applying for jobs that pay too little and to help narrow the gender and racial pay gap — but its biggest effect will be to cause many “difficult” conversations between bosses and current employees, according to Eli Freedberg , a partner in the employment law firm Littler Mendelson.

“When a current employee sees a new salary published and they̵[ads1]7;re at the low end of the range, it’s going to raise some uncomfortable questions,” Freedberg told The Post. “This is going to have a concrete result in inflating the wages of current employees.”

While the law only applies to the five boroughs, experts say it will affect the entire country because employers want to be open to hiring remote workers who live in the city. That means every job imaginable in New York City will soon include pay ranges.

Colorado, Nevada and Connecticut also passed wage range laws in 2021 — and states including California and Washington are set to implement similar measures in the coming months, further increasing the likelihood that wage ranges will become standard across the country.

Some companies, including real estate listing site Zillow, have already begun posting salary ranges online. A typical Zillow listing for a software test engineer reads: “In Colorado, Connecticut, Nevada and New York City, the standard base salary range for this role is $98,600.00 – $157,400.00 annually.”

Remote workers living in cheaper states can demand higher wages when they see what colleagues in more expensive coastal cities are making, Brian Kropp, managing director of consulting firm Accenture, told The Post.

For example, a banker in Charlotte, N.C., might demand a raise after seeing how much new Wall Street hires are making, Kropp said.

The bill was originally supposed to take effect in May, but was pushed back to November due to pushback from business groups such as the Partnership for New York City. Kathy Wylde, the group’s CEO and president, told The Post she was glad implementation of the bill was being pushed back, but said she remained concerned it hurts small businesses.

NYC pay transparency law will spur demands for raises across the country: experts
Zillow has already started revealing salary ranges.
Shutterstock / Tada Images

A female white-collar insurance worker in her 20s told The Post she supports the new law, saying she would likely quit her job if her company offered an identical role with a higher salary range than hers.

“If I [found out I] was underpaid, I would be pissed off and probably leave,” said the worker, who asked not to be identified.

Many workers have taken advantage of rising wages and near-record low unemployment to earn bigger paychecks by switching jobs — a trend that has been dubbed “the Great Resignation.” Promises of new hires have set the stage for a wave of long-term employees demanding better pay, according to Kropp, a human resources expert.

“Companies over the past year have increased wages for new hires to attract them to the labor market — but what very few have done is increase wages for their current employees,” Kropp said.

The only reason current employees who make less money than new hires wouldn’t ask for more money is because they’ve started “actively looking for a new job at another company,” he added.

Banking industry sources said they are already trying to negotiate wages by talking to friends at rival banks and by looking at data from H1-B visas, which require companies to disclose how much they pay certain foreign workers based in the United States.

“The smart people are already using it as a negotiating tactic,” one banker told The Post.

The bill is expected to have less impact on hourly workers in industries such as retail and food service, according to Freedberg, since there is less wiggle room for hourly wages in that industry.

“It definitely affects white-collar jobs more than your retail jobs,” Freedberg said. “The pay in your fast food sector tends to be pretty limited, $15 to $22 an hour, let’s say … there’s not going to be a huge amount of variation.”

Still, Kropp argued that all workers would benefit from knowing how much a potential job might pay before they apply.

Employers who fail to post payroll will not be fined if they add intervals within 30 days of being warned that they are out of compliance. If they fail to add to the range or rack up repeated violations, they can face fines of up to $250,000 per violation.

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