It's Official! Inquiring About Salary History Is Now Off-Limits In NYC

by Akerman LLP
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New York City joins a handful of jurisdictions nationally to prohibit employers from inquiring into an applicant's salary history as part of an effort to curtail pay disparity on the basis of gender.[1] On May 4, 2017, Mayor Bill de Blasio signed into law an amendment to the New York City Human Rights Law, which will take effect on October 31, 2017, that now restricts employers in New York City, with four or more employees, from inquiring into a prospective employee's salary history during the hiring process.

Specifically, the law makes it an unlawful discriminatory practice for an employer to inquire about the salary history of a job applicant, or to rely on the applicant's salary history during the hiring process.  "Salary history” includes not only an applicant’s current or prior wage, but also benefits and any other form of compensation he or she may have received. Employers are also prohibited from making salary inquiries to an applicant’s current or prior employer for the purpose of obtaining the applicant's salary history. These restrictions also extend to an employer conducting a search of publicly available records for the purpose of obtaining an applicant’s salary history.

While the law makes it a discriminatory practice to consider an applicant’s salary history in determining the salary, benefits, or other forms of compensation for that applicant, if an applicant voluntarily and without prompting provides salary history, then this information can be used to determine the salary, benefits, and other compensation, and the employer may verify the salary history. Moreover, although the law restricts employers from inquiring about or relying on salary history, it does not prohibit the employer and the applicant from talking about salary and benefits being offered. For instance, employers may ask applicants what their salary expectations are or what their salary range is. Employers can also inform the applicant about the anticipated salary of the position to which the applicant has applied. The law also does not prohibit employers from verifying an applicant’s background information, but if an employer inadvertently learns about the applicant's salary history during the verification process, the employer cannot rely on the information.

Individuals may bring civil actions for alleged violations of the new law and recover lost wages, compensatory damages, punitive damages, and attorneys' fees. The New York City Commission of Human Rights, on its own investigation, may 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.” 

Accordingly, given the new restrictions established under the act, employers will need to ensure their hiring policies and practices are in line with the act by its effective date. In particular, employers may need to update their hardcopy and online job applications or any other forms that might ask an applicant or an applicant's prior employer for salary history. Employers also need to ensure that all personnel involved in the recruiting and hiring process are fully trained regarding the requirements and restrictions in the act.

 [1] The same type of law in Philadelphia was recently stayed by a federal court and is being challenged on the ground that such laws restrict employers' speech in violation of the First Amendment

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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