NYC Employers Prohibited From Asking Job Applicant’s Salary History

Beginning October 31, 2017, New York City will join a growing number of cities and states across the nation that ban its employers from making inquiries into prospective employees’ salary history.  This new law was designed to address gender-based wage gaps, and is part of a trend in recent wage equity legislation that has been passed in California, Delaware, Maryland, Massachusetts, Oregon and Philadelphia. Similar laws are pending throughout the country, including the federal “Pay Equity for All Act of 2017.”

The NYC law prohibits employers from the following:

• Directly asking applicants for their past salaries.
• Asking former employers, headhunters, recruiters or references for the prospective employee’s salary history.

The NYC law does NOT apply to the following:

• Internal candidates who are applying for a transfer or a promotion with their current employer.
• Public employees whose salaries are determined by collective bargaining agreements.
• Voluntary disclosures by the job applicant to the prospective employers of the applicant’s salary history.
• Objective measures of the applicant’s productivity such as revenue, sales or other production reports, so long as the employer does not ask how that productivity translated into compensation. (Employers may ask about profits generated but not about commission percentage the applicant received.)
• Unvested equity or deferred compensation that an applicant would forfeit or have cancelled by the applicant’s resignation from his or her current or former employer.

The NYC law applies to the following employees and employers:

• Employers of all sizes, if they are hiring applicants in NYC are required to follow the law.
• Most applicants for new employment in New York City, regardless of whether the position is full time, part-time or an internship, including independent contractors who do not have their own employees.

How to prepare for the new law:

• Review existing policies and practices to ensure compliance with the new legislation.
• Review job applications and background check forms to ensure there are no requests for salary history.
• Train human resource staff and hiring managers about permissible compensation questions to ask during an interview.
• Coordinate with outside vendors such as recruiters and background check providers to ensure they will comply with the new law.
• Implement a process to document voluntary disclosure of salary history by an applicant.

Employers who violate the new law may be required to pay damages, a fine and/or be subject to additional affirmative relief such as mandated training and posting requirements. For questions about this new law, please contact Aliza Herzberg or Lori Barnea.