The New York City Council voted to pass an amendment in December 2025 requiring private employers to report pay data annually. This legislation also requires a designated NYC Agency to publish an aggregated employer pay data report. This move solidifies the report as one of the strongest local effects yet to address wage disparities based on race, gender, and ethnicity.
It’s important to remember that this isn’t happening in a vacuum. Over the past few years, states like California and Illinois have introduced similar reporting rules, driving pay transparency from an ethical best practice into a legal requirement. The new NYC pay equity law is the latest, and arguably the most visible, signal that the practice of silent salary structures is coming to a close.
Here's What You'll Learn
What the NYC Reporting Mandate Requires
Under the proposed legislation, covered employers would be required to submit detailed pay data to the city on a recurring basis. The goal is to identify and close gender, race, and ethnicity-based pay disparities.
If passed, here’s what would be expected from covered employers:
- Pay Data by Category: Employers must report compensation information broken down by gender, race, ethnicity, and job category.
- Pay Bands and Ranges: Companies will need to categorize each employee into standardized pay bands, which will allow for comparison of pay levels across demographics.
- Demographic Transparency: Data will show representation and pay levels within each category.
- Annual Reporting: The city will require this data to be submitted each year, ensuring ongoing accountability and visibility into progress.
- Public Disclosure: This will require a NYC Agency to conduct an annual pay equity study with the data to identify pay disparities. They will have to publish the report in aggregate form with their findings and recommendations
The first reports will likely cover pay data from the prior year, meaning HR leaders may need to start making sure their ducks are in a row and their data is organized in early 2026.
Who Does this Effect
The NYC pay equity report requirement applies to employers operating in or employing workers within New York City.
If you’re a private employer with at least 200 employees that file the EEO-1 Component 1 reports, then you’ll likely be covered. The 200-employee headcount covers all those employed in New York City, including full-time, part-time, or temporary employees.
For multi-state or national companies, this adds another layer of complexity. Pay reporting rules are changing in many states, each with its own definitions, formats, and deadlines. Coordinating consistent data collection and reporting processes will be key for HR in managing compliance efficiently.
Estimated Timeline & Implementation
The estimated timeline looks something like this:
- December 2025: The bill was approved by the New York City Council.
- 2026: Once signed into law, NYC would have a full year to designate an agency to administer the law. That agency would then have another year to create and publish a standardized data reporting form for employers to use to submit their pay data.
- Mid–Late 2027: The first NYC pay equity reports are due.
Again, this is an estimated timeline and is subject to change. While it might sound like plenty of time, it’s right around the corner. If your data systems or pay structures aren’t already set up to capture the required information, then now is the time to roll up your sleeves and begin your preparations.
Start preparing now by downloading OutSolve's Pay Equity Checklist today.
Penalties & Risks for Noncompliance
The city is serious about this and isn’t leaving enforcement to chance. The proposed NYC pay equity law includes both administrative penalties and potential reputational consequences for noncompliant employers. These may include:
- Fines and Enforcement Actions: Companies that fail to submit reports on time or provide incomplete data could face financial penalties. This may include civil penalties of $1,000 for the first offense and $5,000 for second or more for additional offenses.
- Reputational Damage: Once pay data becomes public, discrepancies can quickly turn into headlines. In addition to compliance risks, employers also face the loss of employee trust and potential morale issues. This can affect recruitment and retention.
- Legal Exposure: Publicly available data could increase vulnerability to wage discrimination or class action claims if pay gaps are revealed.
The takeaway here? Transparency without preparation can be downright risky. HR should approach this not as a reporting burden but as a strategic opportunity to strengthen pay practices before the spotlight turns on.
How Can New York City Employers Prepare?
You don’t need to wait for the final regulations to get started. Here are five proactive steps HR can take now to prepare for the proposed NYC pay equity report:
- Conduct a Comprehensive Pay Equity Audit
Identify potential disparities across roles, pay bands, and demographics. This will highlight areas where compensation adjustments or structural changes may be needed. - Review Job Classifications and Salary Structures
Make sure that titles, levels, and salary ranges are standardized and consistently applied. Ambiguous or overlapping job classifications are one of the biggest obstacles to clean reporting. - Upgrade Data and Reporting Systems
Confirm your HRIS, payroll, and compensation tools can extract and aggregate pay and demographic data accurately. If not, then it may be time to invest in a system upgrade or pay equity analytics solution. While this can be easier said than done, it can save you from challenges and compliance issues down the road. - Train HR and Compensation Teams
Train your teams on pay equity concepts, data interpretation, and communication. They’ll be on the “front lines” of compliance and need to understand the concepts and lead by example. Employee trust depends on their confidence in the process. - Develop an Internal Transparency Strategy
Prepare your organization for questions. How will you talk about pay data? What steps are you taking to promote equity? Clear internal messaging will help employees understand the “why” behind the numbers. As HR, partner with the departments you support to help facilitate these communication points.
What to Watch For
The NYC Mayor’s office is expected to finalize the legislation before the end of 2025, followed by guidance from the NYC Commission on Human Rights, which would most likely oversee enforcement. Expect clarity on:
- The format and submission method for reports
- Whether data will be made public, and if so, in what form
- Which job categories or employees are excluded (e.g., contractors or interns)
- Any safe harbors or grace periods for first year compliance
Staying tuned to these updates will be crucial for HR and legal teams over the coming months. Subscribe to OutSolve’s newsletter so you don’t miss any important compliance updates.
What the NYC Pay Equity Report Means for Your Organization
The NYC pay equity law truly represents a defining moment in the movement toward fair pay. For HR, it’s both a compliance challenge and a cultural opportunity. By taking steps now, like auditing pay, standardizing job structures, and upgrading reporting tools, you can turn this mandate into a business driver for trust and inclusion.
Getting ahead of this law means you won’t just meet the standard, but you’ll set the standard. Schedule a pay equity consultation with OutSolve.
Download OutSolve’s pay equity audit checklist to guide your next steps. Start building internal communication plans to support transparency.
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