New York City Adopts Pay Reporting Requirements For Large Employers

The New York City Council has overridden Mayor Eric Adams' veto of two pay reporting bills. Large employers operating in New York City will soon be required to adhere to onerous new pay reporting requirements. The stated purpose of the law is to promote wage transparency and to identify perceived pay disparities based on race and gender. As a result, employers will face challenges as to compliance and data integrity issues. Also, employers must anticipate that aggregated pay date will inform public pay equity analysis that the new Mamdani administration may pursue to further its policy priorities.

The new ordinances apply to private employers with more than 200 employees working in New York City. Once implementation is complete, covered employers will be required to submit annual pay data reports containing compensation information, as well as demographic and occupational data, for their New York City workforce. The reporting structure is expected to be modeled after the federal Component 2 EEO-1 pay data reports that were previously required by the EEOC for the 2017 and 2018 reporting periods.

Implementation Timeline and Agency Authority

The legislation does not impose immediate reporting obligations. Instead, it establishes a timeline:

• By December 4, 2026, the Mayor must designate a city agency to administer the law and conduct a pay equity study of the private workforce.
• Within one year of designation, that agency must develop a standardized, fillable reporting form and establish submission procedures.
• Employer reporting deadlines must begin within 12 months after the standardized form is finalized and published and will recur annually thereafter.

Pay data will be submitted anonymously through the standardized form. However, employers must also separately submit a signed certification identifying the employer and attesting to the accuracy of the reported information. The designated agency is granted broad authority to modify reporting requirements over time, including the ability to introduce reporting options that account for different gender identities.

Enforcement and Penalties

The designated agency is required to publish annually a list of employers that fail to comply with the reporting requirements. Before an employer may be publicly identified, however, the agency must issue a written warning and provide a 30-day cure period.

If an employer fails to comply within that period, the agency may impose a civil penalty of $1,000. Subsequent violations may result in penalties of up to $5,000.

Key Takeaways for Employers

Although reporting obligations will not take effect until the agency finalizes the reporting framework, covered employers should evaluate their data-collection systems to ensure they are in a position to accurately track pay, demographic and occupational information and report same when these requirements become effective.

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