Watered Down Pay Data Reporting Likely to Become a Reality for Large NYC Employers
On October 9, the New York City Council approved two bills that could soon require employers with 200 or more employees working in New York City to report pay and demographic data annually and designate a city agency to conduct a pay equity study based upon the reported pay data. These two bills would go into effect immediately upon Mayor Adams’ signing, which is expected to occur soon. We will provide an overview of the two bills and their potential impact on members. Thankfully, as discussed at the end, the version of the bill that has made it to the mayor is only a fraction of what some City Councilmembers originally sought to require, which would have burdened far more employers to a much greater degree.
Pay Data Reporting by Private Employers (Bill Int. 982-2024-A)
While the initial version of this bill was intended to apply to private employers with 25 or more employees, the actual bill sent to the mayor only applies to private employers with 200 or more covered employees. To determine whether a company falls within the reporting requirement, you must count the total number of employees (including full-time, part-time, and temporary workers) working for compensation within New York City. If your workforce fluctuates on a weekly basis, you must use the highest total number of employees concurrently working at any point during the reporting period year.
Once signed, the mayor will have one year to designate an agency that will conduct a pay equity study, which will be tasked with creating a system for data collection. One year after the agency is designated, the agency will be required to provide a standardized fillable form, which may provide for electronic submission, for covered employers to submit pay reports. Employers may choose to submit their reports anonymously.
The detailed pay reports and demographic data would correspond with the categories required by the EEOC in the EEO-1 Component 2 reporting requirements for the 2017 and 2018 reporting years (i.e., compensation reporting by race/ethnicity and gender). Employers would also have the opportunity, if they wish, to provide explanatory remarks regarding the information contained in their reports. All reports must include a signed statement confirming the accuracy of the information, even if submitted anonymously.
Covered employers who fail to comply after receiving a 30-day cure notice will be published on the agency’s website and subject to fines starting at $1,000 for the first offense and increasing to $5,000 for subsequent offenses.
Study on Pay Equity for Private Employers (Bill Int. 984-2024-A)
Utilizing the information compiled from the pay data reporting, the designated agency will have one year to review the data and conduct a pay equity study evaluating where disparities may be prevalent and any trends in occupational segregation based on gender and/or race. The study will be used to prepare general recommendations for employer action plans (not employer-specific) for addressing disparities identified through the study.
Effect on New York City Contractors and What Could Have Been
While this reporting requirement may seem like an inconvenience to larger employers, the version of the bill on the mayor’s desk is just a fraction of what was originally introduced by New York City Councilmembers. Originally, those backing the bill intended for it to apply to any private employer with 25 or more covered employees and to require far more detailed information pertaining to each of its employees to ensure compliance with equal pay laws. While each employee’s name or other identifying information would be redacted, the employer would have to provide the following information regarding each covered employee:
The City Councilmembers’ original intent was to ensure private employers were providing equal pay for equal or substantially similar work and prohibit wage discrimination based upon various protected categories. We found many issues with the original bill. One glaring example being that, unlike federal employee roles and wage scales, simply because private employees have similar job titles does not mean they warrant similar salaries. For example, a brand-new “project manager” on a $50,000 project does not, and should not, earn the same salary as a seasoned “project manager” on a $1 billion project, despite both holding the title of “project manager.” Thankfully, the New York City Council came to understand this and many other issues with the original bill before reducing it to a race/ethnicity and gender-based survey.
Andrew J. Mundo, Esq., MURTAGH, COHEN, BYRNE & MURDY