COMP NEWS – In the wake of New York City’s recent pay transparency law, which requires companies to post salary ranges for job roles they are hiring for, employers are posting pay bands that range by as wide as $100,000.

Employers are testing the limits of a new city law requiring salary ranges on job ads by posting pay bands that, in some cases, span more than $100,000, according to a Bloomberg News analysis of over 400 open roles. 

A field operations manager at Verizon Communications Inc. in Brooklyn, for example, could earn a starting salary anywhere from $92,000 to $171,000. For a New York City-based compliance director at Wells Fargo & Co., the range spans $173,300 to $359,000 — a difference of over $180,000. At International Business Machines Corp., the potential salary for a technology engineer runs from $73,000 to $152,000, more than double, according to postings on company web sites and the job site Indeed.com.

As employers in New York City adjust to the fresh regulations, many listings are leaving applicants more confused than ever. In some of the pay ranges reviewed by Bloomberg, the lower end of the salary band is less than half of the suggested maximum. 

New York City’s new pay transparency law requires companies to offer up realistic salary ranges for jobs in “good faith,” which is defined as what the employer “honestly believes” they are willing to pay to a potential hire.

The new law requires all companies with four or more employees to produce a “good faith” salary range for jobs in the city of 8.5 million people. It defines a “good faith” estimate only as what the employer “honestly believes” they are willing to pay a successful applicant. For the most part, compensation experts admit such things are much more art than science.

Bloomberg gathered a cross section of more than 400 new listings across about a dozen large employers in New York City to see how they’re interpreting that mandate. The approaches vary, as do the width of pay bands.

Companies such as Bank of America Corp., JPMorgan Chase & Co., Alphabet Inc.’s Google, Comcast Corp.’s NBCUniversal and Citigroup Inc. had fairly tight ranges for the jobs reviewed by Bloomberg, with minimum salaries that were 60% to 80% or more of the maximum in many instances. Citigroup and Google, which have started posting salary ranges for all US jobs, appeared to use a specific ratio to set their ranges, while JPMorgan’s and Bank of America’s ranges were less uniform.

Others, including Verizon, Wells Fargo and IBM, opted for wider ranges, with many of the minimum starting salaries coming in at half or less of the maximum. Verizon consistently posted a top-end salary that was about 1.85 times the lowest end of the range; on Amazon.com Inc.’s listings the high end of the range was almost double the low end, typically.

To read more about employers who are skirting New York City’s pay transparency laws, click here.

For more Comp News, see our recent posts.