The Past Is Not Necessarily Prologue: New York City Bans Probes Into Salary History
The new law makes it an unlawful employment practice to inquire about the salary history of an applicant for employment; or to rely on the salary history of an applicant in determining the salary, benefits, or other compensation for such applicant during the hiring process, including the negotiation of a contract.
The law defines “to inquire” as “to communicate any question or statement to an applicant, an applicant’s current or prior employer, or a current or former employee or agent of the applicant’s current or prior employer, in writing or otherwise, for the purpose of obtaining an applicant’s salary history, or to conduct a search of publicly available records or reports for the purpose of obtaining an applicant’s salary history.” It does not include informing the applicant in writing or otherwise about the position’s proposed or anticipated salary or salary range.
According to the law, “salary history” includes the applicant’s current or prior wage, benefits, and/or other compensation. However, it does not include “any objective measure of the applicant’s productivity such as revenue, sales, or other production reports.”
Notwithstanding the general prohibition, an employer, employment agency, or employee or agent thereof may, without inquiring about salary history, engage in discussion with the applicant about their expectations with respect to salary, benefits, and other compensation, including but not limited to unvested equity or deferred compensation that an applicant would forfeit or have cancelled by virtue of the applicant’s resignation from their current employer.
Moreover, where an applicant voluntarily and without prompting discloses salary history to an employer, employment agency, or employee or agent thereof, such employer, employment agency, or employee or agent thereof may consider salary history in determining salary, benefits, and other compensation for such applicant, and may verify such applicant’s salary history.
The law does not apply to:
- Any actions taken by an employer, employment agency, or employee or agent thereof pursuant to any federal, state, or local law that specifically authorizes the disclosure or verification of salary history for employment purposes, or specifically requires knowledge of salary history to determine an employee’s compensation;
- Applicants for internal transfer or promotion with their current employer;
- Any attempt by an employer, employment agency, or employee or agent thereof, to verify an applicant’s disclosure of non-salary related information or conduct a background check, provided that if such verification or background check discloses the applicant’s salary history, such disclosure shall not be relied upon for purposes of determining the salary, benefits, or other compensation of such applicant during the hiring process, including the negotiation of a contract; or
- Public employee positions for which salary, benefits, or other compensation are determined pursuant to procedures established by collective bargaining.
The law takes effect 180 days after May 4, 2017, provided that the Commission on Human Rights may take such actions as are necessary to implement the law, including the promulgation of rules, before such date. When it becomes effective, individuals can file a complaint with the Commission, which has the ability to fine employers with civil penalties of up to $250,000 for willful and malicious violations of the law, and can award compensatory damages to victims, including emotional distress damages and other benefits.
Arent Fox’s Labor & Employment group will continue to monitor developments in this area. If you have any questions, please contact Michael Stevens or the Arent Fox professional who regularly handles your matters.