Pay Equity Requirement for New York Contractors

If your company does business with New York, there is a new law that could impact your likelihood of winning work.

Like many states and municipalities, New York (both City and state) is in the process of enacting pay transparency and equity laws. Recently, New York state lawmakers passed a bill requiring all contractors with work in excess of $50,000 with a state agency to submit equal pay reports. The bill is currently awaiting Governor Hochul’s signature, but a veto is highly unlikely. Once signed, it will go into effect in November 2022.

What does the New York state bill mean for businesses that contract with the state?

  • Any business that contracts with New York state will have to provide a report that details employee compensation by gender, race, ethnicity, job category, and “other relevant data.”
  • “Small businesses” defined as “independently owned and operated, not dominant it its field, and employing not more than 100 individuals” are exempted.

What should your company do?

If you currently do business with New York state, or would like to at some point, you will need to ensure compliance with the law once the governor signs it. To be ready, you should conduct an audit to ensure you are paying employees who perform “substantially similar” work equal pay. Ideally, this audit should be conducted by an outside accounting or legal firm. If any inequities are uncovered, you will need to address them and adjust the pay or salaries for those that fall short.

As you likely already know, Connecticut passed a pay equity law in 2021 that requires equal pay for “comparable,” as opposed to “equal,” work. This includes a requirement that an employer must provide the wage range for a position upon an applicant’s request and prior to, or at the time, of an employment offer. An employee or applicant can bring legal action against a company for a violation of these requirements for up to two years and can receive compensatory damages, attorney’s fees, and in some cases, even punitive damages.

Currently 21 states have some sort of pay equity law on the books, and we expect more laws of this type to pass across the country. If you need help with a pay equity audit, let us know.