NYC Bans Salary History Inquiries During the Hiring Process
On April 5, 2017, in an effort to narrow the gender wage gap, the New York City Council passed legislation that will make it an unlawful discriminatory practice for private employers to inquire about an applicant’s salary history (i.e., current or prior wages, benefits or other compensation) or rely on an applicant’s salary history in determining such applicant’s compensation during the hiring process, including the negotiation of an employment agreement. These restrictions do not extend to any objective measures of an applicant’s productivity such as revenue, sales or other reports, as the law specifically excludes such measures from the definition of salary history, which will help to ameliorate the impact of the restrictions on employers when hiring sales persons. Yesterday, May 4, 2017, Mayor de Blasio signed the legislation, which goes into effect 180 days after such date.
When the law takes effect, employers will be prohibited from asking any question or making any statement to an applicant or the applicant’s current or former employer for the purpose of obtaining the applicant’s salary history. Moreover, the law will ban employers from conducting a search of publicly available records or reports for the purpose of obtaining an applicant’s salary history. The law does not apply to applicants for internal transfers or promotions with their current employer (among other limited exceptions).
Employers are not restricted from discussing with job applicants their expectations regarding salary, benefits and other compensation as long as no inquiry or statement about the applicant’s salary history is made. In addition, if an applicant discloses his or her salary history voluntarily and without prompting, the employer may consider the salary history in determining the applicant’s compensation and attempt to verify the disclosed salary history.
Because the new law is incorporated under the New York City Human Rights Law, employers that violate the law could be liable for, among other things, compensatory damages, front and back pay, civil penalties and attorney’s fees and other costs.
New York City employers should begin reviewing their interviewing and hiring practices for compliance with the law. For example, employers will need to remove salary history questions from job applications and ensure interviewers and hiring personnel avoid asking applicants (and their current and past employers) compensation-related questions during the hiring process. Employers should document and maintain notes of instances where prospective employees voluntarily disclose any past compensation without being prompted. Employers should contact employment counsel with any questions or issues related to the legislation.
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