Transparency To Clear Wrongful Perceptions Creeping Into New York City Pay Along With Labor Certifications For Foreign National Employees
Karma Management has now become Karma Management Global Consulting Solutions Pvt. Ltd. which was incorporated in the year 2004, having now successfully completed almost 18 years of its existence.
As late as April 2021, Karma Global took a very bold step of venturing into foreign shores in terms of shoving up its business prospects in countries like US, UK, UAE, Canada, Philippines and South East Asia.
In a short period of time, it has already made its mark in terms of providing excellent services in the areas of payroll, outsourcing, recruitment and talent acquisition, facility management, HR services and Regulatory compliances including employment contracts in these foreign countries as per feedback and testimonials shared by Global Clients.
Karma Global thus entails the compliances of global clients in these countries as well, and in keeping with the global scenario, it does keep a very hard and close track on the status of global compliances all around the world and especially so, it keeps an update on what is happening as far as people, wages, work and benefits, unions and pay scales are concerned across the globe.
Let us broadly look at “How Fair Pay Perception and Pay Transparency Combats Turnover” before going into the main subject of transparency affecting the hiring process in NYC!
HR departments invest a lot into attracting and retaining talent. This includes investment in compensation strategy and market data to ensure that employees are paid competitively. At the same time, it becomes important for employees to know what goes into determining their pay and ensuring that their pay is fair?
The perception of fair pays and the impact on retention is imperative for this creation in the minds of the employees and the research done in this area, threw up the following questions?
Do employees know if they are paid fairly?
If employees do not know they are paid fairly, are they more likely to leave?
Is pay transparency impactful on an employee’s intent to leave?
Let us examine closely NYC Pay Transparency Law: What It Means for NYC!
The Effective Date for the NYC Pay Transparency law has been amended and changed from May 15th, 2022, to November 1st, 2022.
As of November 1, 2022, most employers in New York City must comply with the City’s new pay transparency legislation. The legislation amends the N.Y. City Human Rights Law (“NYCHRL”), requiring covered employers to include pay information in all job postings.
New York State, for example, has passed its own pay transparency legislation — but it has not been signed into law. The bill has cleared both the State Assembly and State Senate but has not yet been sent to the Governor’s office for signature. If signed, the law would go into effect 270 days later.
Under this law, it will be mandatory to add pay ranges to all job listings for companies based in New York State.
This is following 2017’s salary history law. This law made it illegal for public and private employers of any size in New York City to inquire about an applicant’s salary history during the hiring process. This includes on applications, in interviews and even while conducting reference checks.
As a hiring manager, they did not publish the salary range nor did any one ask what is the salary range? In the world of staffing, some recruiters like to get this information as early as possible while others do not for a number of different reasons.
As a firm built upon the Applicant-Centric philosophy, we certainly see the benefits to pay transparency. We also believe that ultimately it can help employers land the right person for their open role, faster.
The NYC Transparency Law will also help you quickly identify the best match. This is because you’ll be giving full transparency (a top priority for today’s job seekers.) In addition, you’ll likely save time by avoiding the back and forth that traditionally results from the negotiation process.
LET’S EXPLORE WHAT THE NEW YORK CITY COMMISSION ON HUMAN RIGHTS HAS SHARED
Covered Employers:
The law covers all employers who have at least four employees, at least one of whom works in New York City. The law also covers entities that employ at least one domestic worker (i.e., an individual who works in a person’s home to care for their child or dependent).
Job Advertisements That Must Include Salary or Wage Range!
The NYC pay transparency law mandates employers who advertise jobs, promotions, or transfers in New York City to include salary ranges for the position.
This range must, in good faith, state the minimum and maximum rates for the position at the time of posting.
This is for positions performed within the city limits.
This new law covers employers with at least four (4) employees.
Organizations that hire contractors should also evaluate their job-advertising practices, considering the City’s position that pay information should be included in job postings for any category of worker covered by the NYCHRL, including independent contractors in certain circumstances.
Importantly: employers do not need to provide pay information if the job is not advertised. In other words, employers do not need to create a job advertisement before hiring.
The legislation’s goal is to reduce pay disparities affecting historically disadvantaged applicants, which follows a national trend.
This law does not apply to temporary positions advertised by temporary staffing agencies because they already comply with the New York State Wage Theft Protection Act. However, this does include direct hire roles and internal positions at staffing agencies.
Pay Information Required on Job Advertisements
A job posting that only provides the ceiling or floor for pay would violate the law’s requirements. Further, the law’s requirements apply regardless of whether the job is to be paid salary or hourly.
Certain information does not need to be included, such as:
Insurance benefits
Paid time off, including sick leave or vacation leave
Retirement benefits
Overtime benefits
Potential severance pay
Other compensation, such as tips, bonuses and stocks.
Enforcement
The City Commission on Human Rights will maintain jurisdiction to investigate and penalize employers who violate the law. The Commission also has authority to order employers to pay monetary damages to affected employees.
The City’s guidance specifies that employers may have to pay “up to $250,000” for “uncured” violations of the new law.
Individual employees may also file complaints in court against their current employer if they believe their employer did not properly post pay information on an advertisement for a new job, promotion or transfer opportunity.
Impact on Labour Certifications for Foreign National Employees
The new law may have cascading effects on other areas of personnel and HR-compliance. Employers with immigrant workers, for example, could be impacted by the new law. The labour certification (or “PERM”) process required for most permanent residency sponsorship applications requires employers test the labour market to determine whether any qualified, willing and able U.S. workers are available to fill the job before it is offered to a foreign national on a permanent basis.
Before a labour certification can be filed, the employer first must obtain a Prevailing Wage Determination from the Department of Labour, a process that currently takes approximately eight months. Once issued, a Prevailing Wage Determination defines the prevailing wage that must be paid to the foreign national employee upon the granting of permanent residency.
In addition to obtaining a Prevailing Wage Determination, the labour certification process requires the employer recruit for the job being offered to the foreign national. At a minimum, this requires the employer run a web-based job order with the State Workforce Agency where the individual will work, as well as two Sunday newspaper print ads in the newspaper of general circulation in the area of intended employment. In addition, if the job opening is for a professional position, the employer must run three additional ads from a list of ten different types of advertisements, including the employer’s website, job fairs, campus placement offices, via a referral program with incentives, radio and television ads, etc.
Each ad must contain the name of the employer, instructions for submitting one’s resume, a general description of the vacancy, and a description of the geographic area of employment. The ads need not list any wage at all, but if a wage is listed, it must not be lower than the prevailing wage rate assigned by the Department of Labour in the Prevailing Wage Determination, and must not contain wages that are less favourable than those offered to the foreign national on whose behalf labour certification is sought.
From an administrative standpoint, the simplest practice is not to include wages in job ads, and not to start the recruitment process until after the Prevailing Wage Determination has been issued. There are several reasons for this strategy, including the following:
Labour certification applications must be filed no more than 180 days after the first advertisement began to run. Prevailing Wage Determination processing times are unpredictable and can fluctuate. If processing times slow down, this could lead to some ads expiring and needing to be redone.
If the Prevailing Wage Determination comes back at a higher salary than whatever is listed in the internal Notice of Filing (posting notices), then the Notice of Filing will also need to be redone, which could delay the filing of the labour certification significantly.
If the Prevailing Wage Determination comes back at a wage that is in the wrong occupational classification, there will not likely be time to challenge it before the ads expire.
But with competing requirements under new pay transparency laws, employers recruiting foreign workers may need to revaluate their job postings — potentially resulting in delays in hiring foreign workers if ads are not properly crafted at the outset.
As noted above, the New York City wage transparency law requires that wages or salary on job advertisements are listed in the form of a range. By contrast, the U.S. Department of Labour’s PERM regulations permit employers to list either the actual salary offered or a pay range. According to the preamble of Final Rule implementing the current labour certification guidelines, if a salary range is used, the bottom end of the range must not be lower than the higher of the prevailing wage and the wage actually being paid to the foreign national if currently employed by the company. Thus, if an employer were to start recruitment prior to issuance of the Prevailing Wage Determination, and the prevailing wage turns out to be higher than the bottom end of the wage range listed in any of the ads, those ads will need to be redone.
CONCLUSION:
WHAT is it that is still doubtful in this new LAW?
The NYC Pay Transparency law does not define “advertise;” it does not differentiate between internal or external job postings.
In addition, “salary” is not defined. We will have to wait on further guidance by the New York City Commission on Human Rights as the law’ sets in.
It becomes significant for employers to prepare for the upcoming NYC Pay Transparency Law, by considering taking time to audit the pay scales. Also, consider revising your job posting policies regarding employee compensation to ensure compliance. In addition, employers should document their “good faith” discussions when setting pay ranges. This will help defend against claims for violations of the new law.
Another option to consider is partnering with a staffing agency to support your hiring process. One that can give you access to a diverse candidate pool and has a solid reputation for matching job seekers with the right positions for them.
As it will turn out, good faith will mean different things to different employers.
In New York City, a newly enacted pay transparency law requires employers to include a good-faith salary range in job postings.
Consider a recent ad from Citibank that listed a job with a salary range of $0 to $2 million—a spread so broad as to be meaningless. The financial services company has since taken down the ad, blaming it on a “technical issue that is causing some job postings to display a system default salary range.”
Other job ads show salary spreads that are not preposterous but may still be too broad to be useful to job seekers.
For example, the New York Post has advertised a job for a tech reporter with a salary range listed from $50,000 to $145,000. Dow Jones posted an ad on Indeed for a software development engineer with a range of $40,000 to $160,000 a year. Some ads still have no range posted.
The New York City Commission on Human Rights is tasked with investigating complaints about employers not following the new regulation.
The first infraction will result in a warning to the company, while a second could result in a fine up to $250,000.
“We are advising our clients that good faith means good faith,” said Brooke A. Schneider, senior counsel with Greenwald Doherty in New York City. “It doesn’t have to be a terribly narrow range, but certainly when you put in $0 to $2 million, or something like that, I think you could get a challenge.”
Time to Review Pay Practices
New York City has joined other cities such as Toledo, Ohio, and states such as Colorado and California in passing pay transparency laws. The state legislature in New York has passed a similar law, which is awaiting a signature from the governor. The laws are designed to ensure that salaries for women and minorities, who traditionally have been underpaid, are equal to men’s salaries.
A broad salary ranges in a job posting may be considered to be in good faith. Legitimate reasons may include an applicant’s geographic location, experience and qualifications, employment lawyers said.
“If I get a resume from somebody who’s just out of school with no experience, I might pay them at the bottom of our pay scale. Whereas, if somebody has been in this business for 20 years and also has qualifications, I’ll go to the top of my range,” said Peter Shapiro, a partner in the New York City office of Lewis Brisbois. “That’s a good-faith basis, as far as I’m concerned. But to propose a range so wide it’s fictitious, that is where you might have a problem.”
Even a $100,000 range can be problematic if it’s not rooted in reality. “You should be looking at the salary range internally,” Schneider said. “It’s a great opportunity for employers to look at their pay practices and the duties they are requiring of their employees and see how they match up.”
Other findings include:
88% of workers will demand to know the salary range for their current position, if permitted by law; 68% will demand the highest end of known salary range
85% say they’re more likely to apply to job that lists a salary range
42% say the salary ranges companies list should be limited
63% worry salary transparency will cause problems among co-workers
92% of workers support salary transparency laws; 61% say laws will improve wage gap
Karma Global while dealing with all such issues and cases, always takes the approach to act trustworthily and to be compliant with the laws of the land.
Karma Global always advises its clients to be on the good side of the law and to abide by the same. In this respect, it offers a plethora of excellent services in terms of documentation compliance and validity of licenses for running the business and also supports establishments and union afflicted workers to take a just stand on issues, in the company’s interest and not on trivial grounds just for the sake of it, to show the level of aggression.
Karma Global’s integrated regulatory compliance services runs on an expert machinery that is agile and consistent and is simplified for the global clients in a manner that they can easily grasp the subject matter as against the tangled complexity and risk, which gives the global clients the power of confidence and control.
Karma Global is well aware that the lengthening list of supranational regulations is burden enough for any multinational business, while each jurisdiction implements its regime with its own unique local twists, creating a maze of localized regulations.
Our global regulatory health checks, conducted by our teams of local experts, can evaluate your current regulatory standing across every market and solve the country-specific challenges they find.
With our finger permanently on the regulatory pulse – monitoring supranational regulatory schemes and the innumerable pieces of local legislation that give them the force of law – we make sure there are no surprises.
We expertly classify, register, document, assess, review and report across all your regulatory obligations, leaving you free to focus on the business end.
Our deep, country-by-country knowledge, expressed through a 200-strong network of local offices, makes light work of the most intricate local and global reporting obligations.
For clients facing urgent one-off regulatory challenges – perhaps a major cross-border KYC exercise for a time-critical international deal – we can scale-up quickly and easily thanks to a flexible structure and global resource base.
Proprietary blog of Karma Global
This blog has been collated and compiled by the internal staff of Karma Global with the knowledge and expertise that they possess, for its monthly newsletter Issue 06 of December 2022 and in case of specific or general information or compliance updates for that matter, kindly reach out to the
Marketing Team – Kush@karmamgmt.com / yashika@karmamgmt.com