New York Expands Pay Equity Law Beyond Equal Work and Gender and Bans Inquiries into Salary History

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On July 10, 2019, New York Governor Andrew Cuomo signed legislation significantly expanding the protections of New York’s Pay Equity Law, which previously required equal pay for women and men performing “equal work.”1 The governor also signed a law imposing a ban on inquiries into an applicant’s salary history.

New Pay Equity Law

The new pay equity law now mandates equal pay among employees who perform “substantially similar” work, when considering skill, effort, responsibility, and working conditions. This means that employers cannot rely on comparisons among those who share the same title to ensure pay equity.  The analysis must encompass the wage rates among employees who hold different, though “substantially similar,” roles.  Employers should look at groupings or classes of jobs, rather than individual positions. 

The law also now requires equal pay among all protected groups—not just between members of the opposite sex. Protected status includes age, race, creed, color, gender identity or expression, military status, disability, genetic characteristics, familial status, marital status, domestic violence victim status, or other status protected by law.2

Employers can still pay employees working in the same position differently based on their different geographic location, e.g., employees working in New York City might earn more than employees working in Buffalo.  However, employers cannot create geographic classes representing areas smaller than counties.

The new law retains the following prior permissible factors for wage differentials: differences based on (i) a seniority system, (ii) a merit system, (iii) “a system which measures earnings by quantity or quality of production,” or (iv) “a bona fide factor” other than the protected status, such as education, training, or experience.  The employer has to be able to show, however, that the “bona fide factor” is job-related, satisfies a specific business purpose, and is consistent with business necessity. In addition, the employer may not rely on any of these factors if a pay practice disparately impacts any of the protected classes and the employer has refused to adopt an alternative that would not produce a differential.

The new law takes effect on October 8, 2019.

Salary History Ban

The new salary history law prohibits employers from asking applicants or current employees for their wage or salary history as a condition of consideration for employment or promotion, and from asking other employers for that information. Employers also cannot refuse to consider, employ or promote an applicant or current employee based on their salary history or their refusal to provide their salary history. While New York State law is similar to New York City’s salary history ban, New York City law only covers applicants, not current employees.

The law also forbids employers from relying on salary history in setting an applicant’s pay rate, but does not prohibit individuals from voluntarily disclosing such history, including for the purpose of negotiating their wages.  The law allows an employer to verify an individual’s history if the applicant rejects an existing offer of compensation while citing to his or her prior salary.

The salary history ban takes effect on January 6, 2020.

 

Footnotes

1 California, Colorado, Illinois, Maryland, Massachusetts, New Jersey, Oregon and Washington also have expanded their equal pay laws beyond “equal work” to cover employees performing “substantially similar” or “comparable” work.

2 New Jersey’s equal pay law also covers all protected groups.

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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