The New York City Council recently voted to override the veto of Mayor Eric Adams and pass two laws aimed at increasing pay equity and transparency. These laws amend the administrative code of the City of New York and will require private employers with 200 or more employees in the City to annually report certain workforce demographic data to the City.
What’s Required of Employers?
New York Int. No. 982-A requires employers to annually report pay and hours data for their employees by job category, sex, and race/ethnicity. New York Int. No. 984-A, passed on the same day, provides that a designated City agency will conduct a pay equity study based on the data submitted each year. By mandating this data reporting and analysis, the City aims to identify and address potential disparities in compensation related to gender, race, and ethnicity.
New York City employers will submit this information using a fillable, electronic form that the City will develop and provide. While data may be submitted anonymously, employers will be required to submit a separate, signed statement by an authorized agent verifying the accuracy of the information submitted.
The data required by New York City mirrors the data formerly required by the federal government’s EEO-1 Component 2 from the 2017 and 2018 reporting years. EEO-1 Component 1 requires reporting of job category, sex, and race and ethnicity data for all employees. EEO-1 Component 2 required submission of the same information, to include detailed pay data.
While the federal government, through the Equal Employment Opportunity Commission (EEOC), still collects Component 1 data, it has since stopped collecting Component 2 data.
Unlike the EEOC, which eliminated the option to include nonbinary employees in EEO-1 reports this year, the City’s form is likely to include an option for employers to account for different gender identities in their reporting.
Employers who fail to comply with the law may be assessed civil penalties of up to $1,000 for the first offense and $5,000 for subsequent offenses. The City will publish a list of non-compliant employers on its website.
When Must the Data be Submitted?
It may be months or years before employers are required to begin reporting. That is, the mayor has up to one year to designate the City agency to collect the data, and that agency has up to a year to develop the form to collect the data. Employers will have up to a year following the date the form is published to submit their data.
What Will the City Do With the Data?
The agency collecting the data will conduct a pay equity study each year, in collaboration with the New York City Commission on Gender Equity and other agencies, to evaluate the data submitted by employers and evaluate whether there are pay disparities based on gender, race or ethnicity in a particular industry. The agency will also identify trends in occupational segregation based on gender and race or ethnicity. The agency will submit its findings to the mayor and city council each year and will include recommendations regarding employer action plans for addressing disparities. The aggregate data will be published and made available to the public.
Employer Takeaways
While mandatory reporting may not begin immediately, employers should begin preparing. Employers should ensure that they are keeping records of employee census data, including demographic and pay information. Employers may also wish to conduct their own pay equity study.
Ballard Spahr will continue to monitor developments from the City.
Ballard Spahr’s Labor and Employment Group and our Diversity, Equity, and Inclusion Team advise employers on pay equity and transparency laws. Please contact us if we can assist you with advice regarding such matters or in responding to active inquiries, investigations, or proceedings.