$250,000 fines and discrimination lawsuits: How employers should prepare for legal risks under New York City’s pay transparency law

November 3, 2022, 12:12 PM UTC
A white woman with black hair smiles and reaches forward to shake the hand of a man in a grey sports coat with his back to the camera
NYC employers can take proactive measures to avoid breaking the law when looking for new hires.
pixelfit via Getty Images

Good morning, Broadsheet readers! Paramount Global agrees to settle a sexual misconduct investigation, a new sports network for women launches, and how employers can get ahead of legal trouble with NYC’s new salary transparency law.

Let’s be transparent. New York City’s pay transparency law went into effect on Tuesday, giving applicants and current employees visibility into how much a company is willing to pay for a role. The law’s implementation is meant to help close gender and racial wage gaps, especially as rising living costs cut into women’s earnings. 

“We’ve identified transparency as one of the leading tools for closing gender wage gaps because of the workers’ power it provides and employer accountability,” says Andrea Johnson, director of state policy, workplace justice, and cross-cutting initiatives at the National Women’s Law Center. The law is a win-win for both workers and employers, she says, because it introduces a vital accountability mechanism for setting pay, attracts desired talent, and helps employers avoid litigation from disgruntled employees, particularly women.

“Salary range transparency laws are…about helping employers avoid wage gaps from arising at the very outset of an employee’s tenure,” Johnson adds.

Yet by some accounts, discrimination lawsuits against employers are expected to rise, and pay transparency laws could help drive that increase as current employees compare their salaries to those on new job listings and, ultimately, determine they’re being underpaid, and pursue legal recourse. As it stands, women earn 83 cents to the average man’s dollar, and that value decreases for women of color.

Employers that try to skirt the pay law could face up to a $250,000 fine per violation. Anyone, including employees, can file discrimination complaints to the New York City Commission on Human Rights under the law, and violators may also have to pay monetary damages to affected employees, amend postings, or update pay policies.

Companies can take proactive measures to avoid fines and litigation, which tarnish employer brand reputation. For instance, by conducting pay audits, fixing salary discrepancies between employees with similar professional backgrounds, and tying salary ranges to objective metrics such as skill level or years of experience. Creating these structures will also come in handy if employers must defend why they offered an applicant pay that exceeds the high end of the posted salary range.

“Now is certainly the time to be thinking through these issues to best position yourself so that you don’t find yourself in a lawsuit or as the test case for this,” says Kelly Cardin, an attorney and shareholder at Ogletree Deakins.

Johnson shares similar sentiments. “At the end of the day, I don’t think anybody wants to go to court. We just want to be paid fairly, to begin with.”

Paige McGlauflin

The Broadsheet is Fortune’s newsletter for and about the world’s most powerful women. Subscribe here.


- Misconduct settlement. Paramount Global and former CBS chief Leslie Moonves reached a settlement with New York's Attorney General's office over an alleged sexual misconduct coverup against Moonves. Paramount Global is expected to redistribute $22 million to shareholders, with an additional $2.5 million from Moonves. Variety

- New heir. Chief human resources officers are becoming top picks for CEO, a move unheard of five years ago. Briana van Strijp of Anthemis, Leslie Motter of Make-A-Wish Foundation, and Leena Nair of Chanel have all moved from HR to the corner office. Fortune

- 30-year record. California Sen. Diane Feinstein will at 89 years old become the longest-serving female senator once she hits her 30th year in office this week. Maryland Sen. Barbara Mikulski, who retired in 2017, held the previous record. CNN

- Office attire. Gen Z is turning its back on professional attire. More young employees—new to office life themselves—are wearing crop tops to the office. New York Times

MOVERS AND SHAKERS: Fabletics hired Ilona Aman as chief marketing officer. Wearable health technology company WHOOP appointed Jaime Waydo chief technology officer. Gaming media and marketing consultancy Click Media hired Rhonda Walsh as vice president of brand partnerships.


- A streamer of their own. Women’s Sports Network, a new streaming service dedicated to women’s sports, launched on Wednesday. The network, which will air game highlights, original shows, and documentaries, is available on services like Amazon’s Freevee, Fox’s Tubi, and smart TVs. Bloomberg

- SCOTUS disruptions. Three abortion rights protestors were arrested and charged for interrupting a U.S. Supreme Court argument on Wednesday. Bloomberg

- Voter shift. White suburban moms are pivoting back to the Republican Party, according to a new poll from the Wall Street Journal. The demographic, which makes up 20% of the electorate, favors the GOP by 15%, suggesting the energy Democrats cultivated after Roe v. Wade's reversal may be fading. Wall Street Journal


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