New York City Advances Pay Equity Through New Employer Data Reporting Requirements

On October 9, 2025, the Pay Reporting Ordinance (“Ordinance”) and the Pay Equity Study Bill (“Bill”) were passed by the New York City Council. Both measures are pending the Mayor’s final approval before taking effect. Once enacted, they are expected to fundamentally reshape how employers in the nation’s largest city record compensation data and address pay disparities—further energizing the nationwide movement toward pay transparency and equity.

For guidance on pay data reporting compliance, compensation structure, or employment risk management under New York City’s new legislation, contact the ILS legal team at contact@consultils.com. We help employers refine reporting processes, enhance pay equity reviews, and implement compliant frameworks to ensure a smooth transition when the new rules take effect.

Core Content of the Bills

Pay Reporting Ordinance

1. Covered Entities

The ordinance would require private employers in New York City with 200 or more employees to report employee pay information to the city government, with the 200-employee headcount including all employees employed in New York City, regardless of whether they work full-time, part-time, or on a temporary basis.

2. The ordinance's structure creates a phased implementation timeline

• Designation of Administering Agency: The Ordinance gives the City a full year to designate an agency to administer the law after it takes effect.

• Development of Reporting Standards: Once an agency is designated, it would have an additional year to create and publish a standardized data reporting form for employers to use.

• Initial Reporting Deadline: No later than one year after the standardized form is published, covered employers would be required to provide pay data reports to the designated agency, along with a signed statement certifying data accuracy.

• Annual Reporting: After the initial report, covered employers would be required to submit these reports annually.

  
  

3. Data Requirements

The Ordinance would require employers to provide compensation and demographic information on employees similar to what was required by the EEOC's EEO-1 Component 2 reports in 2017 and 2018, which included 12 categories of employee data, including pay, corresponding job titles, sex, race, and ethnicity.

4. Anonymity Provisions

Covered employers would be able to submit reports anonymously, provided they identify themselves in the accompanying certification.

Pay Equity Study Mandate

The second bill would require the designated agency to compile data from pay reports submitted pursuant to the Pay Reporting Ordinance and study whether there are disparities in compensation based on gender, race, or ethnicity. The bill establishes a comprehensive research and transparency framework:

• Annual Studies: Studies would begin one year after the first reports are filed and continue annually afterward.

• Industry-Specific Analysis: Should the designated agency find any disparities, it would be required to identify the industries in which the disparities exist and present its findings to the Mayor and City Council within six months, along with recommendations for employers on how to remedy the disparities, with these recommendations made public.

• Data Publication: The bill would also require the designated agency to publish data from the pay reports in aggregate form, in a manner that does not identify specific employers or employees.

Legislative Background

The Evolution of Pay Data Reporting

New York City would become the fourth U.S. jurisdiction to mandate pay data reporting, following California, Illinois, and, most recently, Massachusetts, even as the Equal Employment Opportunity Commission has rolled back pay data reporting requirements at the federal level.

This development reflects a significant shift in employment law enforcement. While the EEOC briefly collected detailed pay data through Component 2 of the EEO-1 report in 2017 and 2018, that initiative was discontinued. The New York City legislation is modeled after the EEO-1 Component 2 report that was collected by the EEOC in 2019 for the years 2017 and 2018.

State-Level Pay Data Reporting Requirements

The movement toward mandatory pay data reporting has gained momentum at the state level:

• California: Private employers with 100 or more employees and at least one employee based in California are required to file the California Pay Data Report, with employers required to report on median and mean wages within each EEO-1 category and on persons hired through labor contractors.

• Illinois: Illinois requires companies with 100 or more employees in Illinois that are also required to file an EEO-1 report to submit employee demographic and compensation data, along with an Equal Pay Compliance Statement signed by a corporate officer, with employers notified by the Illinois Department of Labor of their required submission date, generally every two years.

• Massachusetts: Massachusetts employers with 100 or more employees who are subject to the filing requirements of the federal Equal Employment Opportunity Commission shall annually submit wage data reports to the state secretary, with reports required to include demographic and pay data information categorized by race, ethnicity, sex and job category, with the first reporting due February 1, 2025.

The Broader Pay Transparency Movement

The issue of pay data reporting to state and local governments toward a better understanding of pay equity issues is part of an ongoing trend. This trend encompasses not only data reporting but also salary range disclosure requirements that have proliferated across multiple jurisdictions in recent years.

The National Context: A Growing Trend

Federal Developments

The EEOC's discontinuation of Component 2 pay data collection created a vacuum that states and localities have begun to fill. This represents a significant shift in employment law enforcement, with subnational governments taking the lead on pay equity initiatives.

State and Local Innovation

Multiple jurisdictions have developed their own approaches to pay data collection and analysis, creating a patchwork of requirements that multistate employers must navigate. Each jurisdiction has crafted its own unique framework, with variations in:

• Coverage thresholds

• Reporting frequencies

• Data elements required

• Public disclosure provisions

• Penalty structures

  
  

Implications for National Employers

Organizations operating in multiple jurisdictions face the challenge of complying with different pay data reporting regimes. This complexity may drive some employers toward more standardized, comprehensive pay equity practices that exceed any single jurisdiction's requirements.

Impact on Employers

Compliance Obligations

• Increased Direct Obligations: Platforms must legally respond to collective bargaining requests and incorporate negotiation results into agreements without unilateral modification.

• Administrative Burden: The report would require placing covered employees within pay bands and reporting them by EEO-1 category, gender, and race/ethnicity.

• Data Certification: Employers must provide signed statements certifying the accuracy of submitted data.

• Annual Compliance Cycle: After the initial report, employers must maintain an annual reporting schedule.

Penalty Structure

• First violation: Subject to a civil penalty of $1,000. If corrective action is completed within a 30-day grace period, only a written warning will be issued, and the employer will not be listed on the public violation registry.

• Second or subsequent violations: Each offense will incur a $5,000 fine.

• Public disclosure: The designated agency will publish an annual list of noncompliant employers on its official website.

Anticipated Implementation Timeline

With the bills passing the City Council with a veto-proof majority, employers with 200 or more New York City employees should anticipate new reporting obligations to come due within 24 months. The phased implementation provides employers with time to prepare, but the clock begins ticking once Mayor Adams acts on the legislation.

Employer Response Strategies

• Monitor Legislative Developments: Covered employers should be on the lookout for release of a standardized reporting form, publication of which will start the one-year clock for the employer's first report.

• Assess Current Data Systems: Employers should evaluate whether their existing human resources information systems can generate the required data in the necessary format.

• Review Compensation Structures: Organizations should conduct internal assessments of their pay practices to identify potential disparities before they become subject to external review.

• Establish Compliance Teams: Form cross-functional teams involving HR, legal, and operations to coordinate compliance efforts.

• Data Management Infrastructure: Employers may need to upgrade their recordkeeping systems to accommodate expanded pay data tracking and reporting requirements.

• Pay Equity Audits: Conducting privileged pay equity audits under attorney-client privilege can help identify and address potential issues proactively.

• Communication Planning: Develop strategies for communicating with employees about pay practices and any changes implemented in response to identified disparities.

• Policy Documentation: Ensure that compensation policies are clearly documented and consistently applied across the organization.

The passage of Pay Reporting Ordinance and Pay Equity Study Mandate by the New York City Council represents a significant development in local labor law. If enacted, these bills will place New York City at the forefront of municipal pay equity enforcement, joining a growing number of state and local governments that have concluded that systematic pay data collection and analysis are essential tools for addressing compensation disparities.

The issue of pay data reporting to state and local governments toward a better understanding of pay equity issues is part of an ongoing trend. As this trend continues, employers should expect increased scrutiny of their compensation practices and heightened expectations for pay equity.

For organizations operating in New York City, the time to prepare is now. While the implementation timeline provides some breathing room, the complexity of gathering, organizing, and reporting the required data should not be underestimated. Employers who begin preparing early will be best positioned to meet their obligations efficiently and effectively.

For guidance on pay data reporting compliance, compensation structure, or employment risk management under New York City’s new legislation, contact the ILS legal team at contact@consultils.com. We help employers refine reporting processes, enhance pay equity reviews, and implement compliant frameworks to ensure a smooth transition when the new rules take effect.

Disclaimer: The materials provided on this website are for general informational purposes only and do not, and are not intended to, constitute legal advice. You should not act or refrain from acting based on any information provided here. Please consult with your own legal counsel regarding your specific situation and legal questions.

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As Managing Partner at ILS, Richard Liu ranks among the leading U.S. attorneys in corporate, employment, and regulatory law. He is known for crafting legal strategies aligned with clients’ business objectives and advising Fortune 500 companies, startups, and executives on corporate transactions, financing, privacy, and employment matters across the technology, healthcare, and financial sectors.

Before founding ILS, Richard practiced at top defense firms, where he developed a reputation for anticipating risks and designing strategies that balance protection with growth. He has secured favorable outcomes in contract and intellectual property disputes, represented clients in state and federal courts, and is recognized for combining large-firm expertise with boutique-firm agility. Richard is also a frequent speaker at industry and legal conferences.

Email: contact@consultils.com | Phone: 626-344-8949

Jared Xu is a litigation attorney with nearly a decade of experience representing clients in complex commercial and high-value civil disputes before both state and federal courts. He has achieved notable results in matters involving real estate, business torts, intellectual property, and employment disputes.

Jared’s litigation practice spans all stages of the process—from initial pleadings, discovery, and summary judgment to trial and appeal. Combining his multilingual skills, strong academic background, and specialized expertise in business law with experience at both international and boutique law firms, Jared delivers strategic and tailored legal solutions to his clients.

Email:  contact@consultils.com | Phone: 626-344-8949