Pay Transparency is a hot topic these days.
In 2021, Colorado was the first state to enact a pay transparency statute, and others have followed suit.
As many of you know, last year, New York City (“NYC”) enacted a law that requires employers to list salary ranges in advertisements or postings for job opportunities or promotions.
On December 21, 2022, Governor Hochul signed into law the New York State Pay Transparency which will take effect on September 17, 2023.
The state law follows New York City’s law to a large degree, however, it has additional requirements regarding record keeping as to job history, job descriptions, and salary ranges. Attorneys Piercey, Carter, and Arnold of Mintz Levin provide a great overview and its impact here.
Generally, pay transparency is a wonderful thing. It narrows the pay gap between men and women, as well as people of color and it is designed to provide employees the much-needed clarity in pay that many believe is long overdue.
But, how does a law firm handle this, given the fact that pay ranges can be very broad for attorney roles depending upon the level of experience, graduation year, area of specialty, and so on?
If you are a law firm that has radical transparency in pay, this law is a breeze and probably fits quite nicely into your existing pay platform. However, for a vast majority of small, boutique, and mid-sized law firms, this is not the case.
The law’s requirements will have a deeper impact than just including the salary range in a job advertisement. Law firms will have to evaluate the impact of advertised salaries on their current employees. If there is a disparity in ranges, firms will also have to consider this as well.
With attorney hiring, there is an opportunity for firms to create a pay scale based on graduation year similar to the Cravath scale (we are not suggesting adopting the actual numbers, just the methodology!). Or perhaps, as some mid-market firms do, formulate a pay scale contingent on the average hourly billable rate of the particular group or specialty of law. It could also be as simple as a case-by-case analysis of the role and salary parameters for that role.
As to actual job postings, we have asked law firm hiring managers how they have changed their approach to job postings in light of the new law.
Here is what some top firms are now including:
- Using the word “anticipated” before providing the salary range
- Adding that in “in compliance with the NYC Human Rights Law, the salary range for this position is …”
- Disclaimer that the salary range may vary based on qualifications or geographic location outside of NYC
- Discretionary or merit-based bonus program as well as a great benefits package (link to the website describing benefits)
- After the salary range, stating “this range represents the firm’s reasonable estimate of possible compensation at the time of posting”
No matter where your law firm is at, we at Project Recruit are here, ready to help you navigate pay transparency laws together. We are your trusted partner in recruiting and will help in any way that we can.
