NYC Bans Salary Inquires from Job Applicants

On May 4, 2017, New York City Mayor Bill DeBlasio signed into law an amendment to the New York City Human Rights Law (“NYCHRL”).  Under this new law, which is intended to reduce pay discrimination, New York City employers cannot ask or say anything to job applicants or the applicant’s current or former employers to try to learn about the applicant’s salary history.  However, they are permitted to tell job applicants about the anticipated salary or salary range for the position.

The new law also prohibits New York City employers and employment agencies from relying on a job applicant’s salary history when they make decisions about salary, benefits or other compensation during the hiring process.  That expressly includes prohibiting using such information when negotiation an employment contract with a new employee.  However, the prohibition does not apply to: (1) job transfers and promotions within the same employer; (2) instances where there is another federal, state or local law that specifically permits or requires salary history to be disclosed or verified to determine an employee’s compensation; or (3) public employees whose salary, benefits or compensation is determined by a collective bargaining.

In addition, this amendment to the NYCHRL prohibits employers and employment agencies from searching public records to try to find out about a job applicant’s salary history.  But they can obtain background checks on job candidates, even if the background check includes salary history information, as long as they do not use that information when making decisions about salary, benefits or compensation during the hiring process.

The new law further permits employers and employment agencies to ask job applicants about their expectations about salary, benefits and other compensation as long as they do not ask about salary history.  They also can ask job candidates about any unvested stock options or other deferred compensation that the job applicant would lose by resigning from his or her current job.

Moreover, the law indicates that if a job applicant voluntarily provides information about his or her salary history without prompting, an employer or employment agency can consider that information when it makes decisions about salary, benefits and compensation, and can attempt to verify the information it received.

Notably, the new law defines “salary history” to include not only past and prior wages, but also benefits and other forms of compensation.  It also makes it clear that salary history does not include any “objective measure of the applicant’s productivity such as revenue, sales, or other production reports.”

On his official website, Mayor DeBlasio refers to this new law as a “milestone achievement in the fight for pay equity.”  As the Mayor explains: “It is unacceptable that we’re still fighting for equal pay for equal work.  The simple fact is that women and people of color are frequently paid less for the same work as their white, male counterparts.”

The NYCHRL permits an employee who prevails in a discrimination claim, including violations of the new salary history provisions, to recover economic and emotional distress damages, as well as punitive damages and attorney’s fees.

The amendment to the NYCHRL is expected to go into effect 180 days after it was enacted, meaning on October 31, 2017.