The New York City Council passed a bill last month that makes it an "unlawful discriminatory practice" for employers to inquire about the salary history of a prospective employee. An employer also may not conduct any form of search through publicly available information for an applicant's salary history.
Additionally, the bill prohibits employers from relying upon salary history in determining the salary, benefits or other forms of compensation for that applicant. But if an applicant voluntarily provides salary history, without prompting, then this information can be used to determine the salary, benefits and other compensation.
The law does not prohibit the employer and the applicant from discussing salary and other compensation and benefits being offered. For example, an employer can inform the applicant about the anticipated salary of the position and can inquire about and discuss the applicant's salary expectations.
The new law will be enforced by the New York City Commission on Human Rights. The Commission can impose a civil penalty of up to $125,000 for an unintentional violation and up to $250,000 for a "willful, wanton or malicious act." Individuals also may bring a civil lawsuit for violations of the law and the relief available in such a lawsuit includes back pay, compensatory damages and attorneys' fees. The law will go into effect 180 days after signing by the Mayor, which is expected shortly.
The stated purpose of the law is to eliminate what supporters say is one of the reasons the wage gap between men and women continues. Employers should review their policies and hiring practices to be certain that questions regarding salary history are eliminated and anyone involved in the hiring process must be trained as to the law's requirements. To avoid claims that salary history was disclosed involuntarily or at the prompting of the interviewer, an employer should document when an applicant voluntarily discloses salary history.
Employers also should use the new law as an opportunity to review whether they are complying with New York's Equal Pay Act, which was recently amended to require that any pay difference between men and women doing the same job be based on a "bona fide factor other than sex," and that the bona fide factor be related to the job.
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Should you have any questions on this or other employment-related matters, please contact Mr. Gefen at 516.437.4385, x119, or agefen@vmmlegal.com.
