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After the NYC Council voted to override a veto by former Mayor
Eric Adams, New York City will soon require large employers to
report pay data by employee race, ethnicity, and gender.
NYC Pay Data Reporting Coverage and
Requirements
As we previously reported, while these new
requirement take effect immediately, covered employers—i.e.,
employers with 200 or more employees in New York City (including
full-time, part-time and temporary employees)—will have some
breathing room, as the City must first implement the process for
the submission of such information.
First, the law requires that an agency be designated within one
year of the law taking effect (i.e., by December 4, 2026), at which
point the designated agency has one year to develop a standardized
fillable form for covered employers to submit pay reports.
Within one year of the designated agency publishing the
standardized form, and annually thereafter, covered employers must
submit to the designated agency:
- A pay report that includes current information corresponding
with the categories of information required by the Equal Employment
Opportunity Commission (EEOC) in the EEO-1 “Component 2″
reporting requirements for reporting years 2017 and 2018; and - A separate signed statement confirming the submission and
accuracy of the pay report.
As noted above, the NYC pay report will track pay data
information that private sector employers with 100 or more
employees, as well as certain federal contractors/subcontractors,
were previously required to compile and submit to the EEOC as part
of annual EEO-1 reporting requirements for years 2017 and 2018.
This information included aggregate pay and hours-worked data
across 12 pay bands broken out by job category and by race,
ethnicity, and sex.
Component 2 pay data reporting has not been required as part of
annual EEO-1 reporting since 2020, when collection of the 2018 data
closed and the EEOC published a Federal Register notice reflecting
it could not seek approval to continue Component 2 reporting. As
such, the NYC law will effectively reinstate an obligation for
those employers covered by the City law that has not existed for
several years. It is further noted that the designated agency would
be authorized to adopt modifications for the NYC pay report, which
could include (but would not be limited to) inclusion of reporting
options accounting for different gender identities beyond male and
female.
How Pay Data Will be Compiled and Used
While employers will have an option to submit the pay report
anonymously, the separate signed statement must identify the
employer. Within one year after covered employers submit their pay
reports, and annually thereafter, the designated agency will
conduct a pay equity study and publish the data contained in the
reports in the aggregate, and in a manner that does not reveal a
covered employers’ or employee’s identifying
information.
Penalties for Noncompliance
Violations of the law will subject employers to civil penalties,
as follows:
- For the first offense, a covered employer will be subject to a
written warning if the employer provides, within 30 days of the
service of summons, documentation indicating that such violation
has been cured. If the employer fails to provide such
documentation, they will be subject to a civil penalty of $1,000;
and - For any subsequent offense, a covered employer will be subject
to a civil penalty of $5,000.
The designated agency will also publish annually on its website
a list of covered employers that fail to comply with the reporting
requirements.
Other Pay Data Reporting Laws and Pending
Bills
With the enactment of this new requirement, NYC will join a
small—but potentially expanding—group of jurisdictions
requiring employer pay data reporting.
California has required private employers with
100+ employees in total (and at least one employee in CA) to submit
annual workforce pay and demographic data reporting to he
California Civil Rights Department since March 2021 (with certain
modifications over time). Reports are organized by establishment
and include breakdowns by job category, pay band, race, ethnicity,
and sex, along with hours worked. Employers face per-employee civil
penalties for non-compliance.
Illinois began requiring private businesses
with more than 100 employees in Illinois to obtain an Equal Pay
Registration Certification, with the first certificate having been
required by March 23, 2024 and continuing every two years
thereafter. To obtain a certificate, employers must submit certain
information to the Illinois Department of Labor, including (i) the
employer’s most recently filed EEO-1 report; (ii) a list of
employees separated by gender, race, and ethnicity with
employee-level data including county, dates of employment, and
total wages; and (iii) a signed compliance statement meeting
certain specifications.
And in a related requirement, effective as of February 2025, Massachusetts employers with 100+ employees in
MA are required to annually submit to the MA state secretary copies
of their EEO-1 report as submitted to the EEOC. Employers covered
by the EEOC’s EEO-3 (covering local referral unions), EEO-4
(covering state and local governments), and/or EEO-5 (covering
public elementary and secondary school systems) reporting
requirements are also required to submit to the MA state secretary
copies of such reports on a biannual basis.
Looking ahead, the New York state legislature is currently considering a bill that would require
employers bidding on state contracts to annually submit employee
pay data broken down by job category, gender, race, and ethnicity,
as well as the difference between pay averages in each category, to
the New York State Comptroller.
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