Today, the five borough chambers of commerce and the Partnership for New York City sent the following letter to members of the New York City Council in support of the proposed amendments to Local Law 32:
Local Law 32 established a new mandate on employers that was enacted in the final session of the last City Council (December 2021) without any meaningful public input or consultation with employers. It requires that every internal and external job posting include the minimum and maximum salary for that position. The law is effective in mid-May, less than 60 days after guidance was issued by the Human Rights Commission and without any process in place for informing employers about a law that requires a major change in their hiring practices. It impacts approximately 200,000 businesses and 30,000 nonprofit organizations in the five boroughs, most of which have no knowledge of the legislation. It also comes in the middle of a local labor shortage, particularly in those sectors most impacted by the pandemic: health care, retail, and food services.
New York City is a highly competitive labor market, where most employers are committed to gender and racial pay parity. The inclusion of minimum and maximum salaries in job postings is one tool that advocates have embraced for achieving this objective, but is not necessarily the most appropriate tool for the New York labor market and certainly has consequences that the City Council did not consider when framing this legislation. For example, to secure the skills needed in an industry like health care, employers may offer different compensation packages to attract licensed professionals from outside the city. In the corporate sector, employers are seeking to diversify their executive teams and may offer higher compensation for BIPOC job candidates. The city’s MWBE firms are generally at a disadvantage in competing for scarce talent and are likely to be outbid if a majority competitor has access to their salary offering. In the tech sector, the promise of equity stakes in a startup venture is a major factor in recruitment; in the financial services industry, the potential for performance bonuses at the end of the year is a greater consideration than salary but cannot be calculated until business earnings are realized at the end of the year. When it comes to small businesses and nonprofits, salaries are typically determined on the basis of the particular skills and qualities that an individual candidate offers and the calculation of what they will contribute.
Although the employer has discretion with respect to minimum and maximum salaries that are posted, existing employees will be watching what range is offered to new employees and will inevitably question how that relates to their own compensation. During a labor shortage, or in the context of achieving diversity goals, the posted maximum may be significantly higher than the historical salary ranges, creating dissatisfaction in the workforce and demands to adjust existing pay scales that the employer may be unable to afford.
Intro 134 seeks to amend the law to address some, but not all, of these issues. First, it would push back the effective date to allow for notification and planning for how to implement a new policy that will impact all employees, not just new hires. Second, it would exempt the smallest businesses and nonprofits from the law, both to avoid imposing yet another city mandate on struggling small employers. Finally, it would clarify that the law applies only to jobs that are located at least partly in New York, recognizing that multi-national and multi-state employers have different salary ranges depending on the cost of living and competitive standards in various locations and that they are obligated to follow the laws and regulations that are specific to each jurisdiction.
As representatives of a range of employers, we would also propose additional amendments that would exempt industries with severe labor shortages from the application of the law. We would also propose that only minimum salary postings are required for highly compensated jobs (the median compensation in New York City is about $58,000) because these are often jobs where salary is not a fair indication of total compensation. The most qualified candidates may not apply for jobs where the maximum appears to be less than they are seeking and employers may use the information in job postings to outbid their competitors for top talent.
We thank Speaker Adams, Council Member Williams, and Council Member Brannan for their willingness to consider the views of employers in amendments to this law. We support the goal of the original legislation to maximize transparency and parity in the city’s labor market and think it is in the public interest to ensure that New York has employment policies that work for both employers and employees.
Linda Baran, President and CEO, Staten Island Chamber of Commerce
Thomas Grech, President and CEO, Queens Chamber of Commerce
Randy Peers, President and CEO, Brooklyn Chamber of Commerce
Lisa Sorin, President and CEO, Bronx Chamber of Commerce
Jessica Walker, President and CEO, Manhattan Chamber of Commerce
Kathryn Wylde, President and CEO, Partnership for New York City