Business Groups Unhappy With New York Pay Disclosure Order

Nov 13, 2017
| David Pearson
Business Groups Unhappy with New York Pay Disclosure Order

Back in September, we wrote about New York City’s salary inquiry ban. The purpose of this law was to help eliminate gender pay gaps, and it had a few significant impacts on NYC employers. With the law now in effect, another regulation has taken center stage, this time though the implications would be felt throughout the state of New York.

In January 2017, New York Governor Andrew Cuomo signed Executive Order 162, which (along with Executive Order 161) intended to crack down and prevent gender and race discrimination in the state. The order would require any company that was contracted to do business with New York for $25,000 or more to provide job titles and salaries for all employees who are working on state-contracted projects. Gender and race information would also have to be disclosed under this order.

State contractors would be required to disclose this information on a quarterly basis. If projects exceed $100,000, then reporting would need to happen on a monthly basis. In addition, the same requirements would apply to subcontractors working on a state assignment.

The order is set to go into effect in January 2018, but it appears that there could be a hold up. New York business groups are unhappy with the order and what it would mean for employers, casting some doubt on its future. However, the Cuomo administration is adamant about pushing the order through in order to address concerns around the wage gap, and not all groups are opposed to the order.

Why Are Business Groups Fighting the Order?

With January now only a few weeks away, business groups are joining together in an attempt to fight the law, or at least have some aspects removed or edited. The biggest concern from the business groups is that they are worried about the information that will be disclosed. The groups have said that the information given wouldn’t provide any context around salary data. The information gathered wouldn’t explain why employees make their salaries, such as years of experience or expertise in a certain area. The business groups are worried that this could lead to a false appearance of pay discrimination.

Additionally, the groups say that having to report this data once per quarter or every month (depending on the size of the contract) is time and resource-consuming for businesses and could compromise sensitive employee information.

New York business groups are hopeful that the order will be overturned or altered based on a decision by California Governor Jerry Brown last month to veto a similar bill. The governor said that it was uncertain that the bill would provide the data necessary to impact the gender pay gap.

Despite the pushback from business groups, not all are opposed to Governor Cuomo’s order. Women’s advocacy groups have strongly supported the measure and see it as a step in the right direction to address the wage gap in the state of New York.

What Are the Next Steps for the NY Pay Disclosure Order?

As of now, the order is still moving forward and the January 2018 effective date is still in place. However, the Cuomo administration has recently said that the date could be pushed back in order to draft a policy that everyone feels more comfortable with. The administration is currently talking with concerned business groups in order to try to reach an amicable resolution with the order.

It appears that administration is considering ways to make the order less cumbersome for businesses while still obtaining the information needed to address the wage gap. While some business groups are hoping for the order to be scrapped all together, some are more open to collaboration in order to make the order work. For example, the Partnership for New York City (a business-advocacy group) said they support the goals of the order but hope for an edited version that addresses the concerns of businesses.

Updates Surrounding the New York Pay Discrimination Order Should Happen Soon

For New York employers wondering about the outcome of this order, we should be hearing more updates within the coming weeks. With January only a few weeks away, both the Cuomo administration and business groups will want some initial outcomes to happen sooner than later. The administration has already said it would be willing to push back the effective date of the order, so that is something employers should pay close attention to.

As with any HR-related law or policy change, employers shouldn’t hesitate to reach out to their HR and/or compliance vendors or experts with any questions and concerns. This new order would have significant impacts if and when it takes effect, and employers need to know how they will be impacted and how to stay compliant with this new human resources regulation.

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