New York State Passes Salary History Ban

June 27, 2019Alerts

New York State is poised to prohibit employers from relying on or inquiring about an applicant’s or employee’s wage or salary history.

An amendment recently passed by the state legislature would bar employers in New York from seeking wage or salary history information from an applicant, employee or from the applicant’s former employer.

The amendment is intended to prevent employers from using salary history information as a condition of an offer for employment, continued employment or promotion. Gov. Andrew Cuomo is expected to sign the law, which will take effect 180 days later.

Businesses should make necessary plans to ensure that their hiring staff, interview practices and job application materials comply with the law's requirements.

Background

After Governor Cuomo signed an Executive Order in January 2017 requiring all New York State entities to adopt salary history blind hiring practices, further legislation on the issue seemed inevitable. As anticipated, New York State has now joined the ranks of other jurisdictions that have passed laws banning salary history inquiries, including Massachusetts, Oregon, Delaware, Philadelphia, Puerto Rico, New York City and Suffolk, Westchester and Albany Counties in New York State. This legislation follows the New York State legislature’s recent trend of passing legislation intended to protect employees from discrimination, harassment and other unfair practices.

How the Law Affects Employers

While the salary history ban is relatively clear about prohibiting the use of salary history information regarding employment or promotion, the law does not clarify how and to what extent an employer can use a current employee’s salary information for promotions. We assume that the prohibition is limited to inquiring about current employee’s prior wage and salary information (related to past employment). Notably, an employer is only permitted to confirm wage or salary history after an offer of compensation is made and the employee responds to that offer by providing prior wage or salary information to support a negotiation for a higher wage or salary.

The law also prohibits refusal to hire or retaliation based on failure to provide wage or salary information and arms individuals with a private right of action. This means that an applicant or employee may bring a civil action for compensation for any damages sustained as a result of such violation. The court may also award injunctive relief as well as attorneys’ fees to a prevailing plaintiff.

In light of this impending legislation, employers should train all employees involved in the interviewing and hiring process to be aware of the new requirements. Employers should also review applications to ensure the removal of any questions that could “require” applicants to reveal prior compensation.

For more information about this Alert, please contact Carolyn D. Richmond at 212.878.7983 or [email protected], Glenn S. Grindlinger at 212.905.2305 or [email protected], Bryn Goodman at 212.878.7975 or [email protected] or any other member of Fox Rothschild’s Labor & Employment Department.