Action Item: On May 4, 2017, New York City Mayor Bill DiBlasio signed Int. No. 1253-A, a bill making it unlawful as part of the hiring process for an employer to ask about or rely on a prospective employee’s prior salary history. The bill is scheduled to take effect on October 31, 2017, 180 days after signing.

Hailed as a step toward gender pay equity, the bill is intended to prevent women, whose pay levels have historically trailed those of men, from being penalized because of earlier under-compensation. The bill will force employers to set a pay level that fits the job, not one that allows the employer to set compensation based on a “market level” where women may have been underpaid.

The bill brings private employers in New York City in line with city agencies, which have been covered by a November 2016 Mayor’s executive order barring prior salary inquires in hiring.

Specifically, the bill adds a new section 8-107(25) to the New York City Administrative Code that makes it an unlawful discriminatory practice for an employer, employment agency (or their employees or agents) “[t]o inquire about the salary history of an applicant for employment,” or to rely on the salary history during the hiring process in determining salary, benefits, or other compensation.

Under the new law, “to inquire” includes both communicating with the candidate or his or her current or prior employer (or a current or former employee or agent) for the purpose of obtaining salary information, and conducting a search of publicly available records for that information. “Salary history” includes current or prior wages, benefits, or other compensation, but does not bar a prospective employer from requesting information regarding measures of productivity such as revenues, sales, or production.

Importantly, the new law does not prohibit an employer from using information that is provided by an applicant “voluntarily and without prompting.”

The law also does not apply (a) where the information is needed to comply with other legal requirements, (b) to current employees seeking “internal transfer or promotion,” (c) when salary history is needed to verify other information as part of a conflict check, or (d) to public employee positions where compensation is determined through collective bargaining.

What Employers Should Do – Employers should take a number of steps during the six months prior to this law coming into effect.

• Be sure human resources personnel, outside employment agencies and recruiters, and anyone involved in the interviewing and hiring process, is aware of and understands this new restriction;
• Check and revise as necessary job applications, job orders with employment agencies, job postings and advertisements; and
• Consider adopting a procedure to document any voluntary disclosure of salary information by a candidate.

With this law, New York City joins Philadelphia, Massachusetts, and Puerto Rico, which have adopted similar measures, although, as we wrote previously, the Philadelphia law is on hold pending the resolution of federal court litigation.