Today is the fourth in a five-part blog series on New York’s sweeping changes to the legal landscape for Empire State employers. In prior posts, we covered limitations on the use of nondisclosure provisions in settlement and separation agreements, the new standards for litigating and defending harassment claims, and expanded equal pay protections. Today, we will discuss important changes that will affect hiring practices – most notably, a statewide ban on salary history inquiries.

In another legislative move to broaden the state’s anti-discrimination laws, New York state will now prohibit employers from asking applicants or current employees about their wage or salary history. This new law will go into effect 180 days after Governor Cuomo signs the legislation, which he is expected to do. While New York City, as well as Albany, Suffolk, and Westchester counties, have enacted salary inquiry bans over the past few years, Empire State employers outside those jurisdictions have been free to ask applicants and current employees about their wage or salary history – until now.

The new Bill will revise the New York Labor Law to prohibit all private and public employers in New York state from:

  • Relying on the salary history of an applicant in determining whether to offer employment or in determining salary;
  • Requesting salary history from an applicant or employee as a condition to be interviewed or considered for employment or a promotion; or
  • Requesting the salary history of an applicant or employee from a current or former employer.

The new law will also prohibit employers from retaliating against an applicant or employee because (s)he did not provide salary history or because (s)he filed a complaint with the New York State Department of Labor alleging a violation of the statute. The purpose of the salary history ban is to prevent employers from (intentionally or unintentionally) perpetuating pay disparities between gender, race, and other protected characteristics, by using historical pay data to set future wages. This change comes on the tail of the U.S. Equal Employment Opportunity Commission’s initiative to collect pay data as part of the EEO-1 filing process for employers.

Employers should note, however, that the revised law provides two key carve-outs to the salary inquiry ban. First, applicants and employees may disclose or verify their wage or salary history provided they do so voluntarily and without prompting by the employer, including for the purpose of negotiating wages or salary. Second, employers will be permitted to verify wage or salary history if, at the time an offer of employment with compensation is made, the applicant or employee responds by providing prior compensation history to support a request for a wage/salary that is higher than that offered by the employer.

To ensure compliance, employers should immediately review all applications and pre-employment forms to remove any salary history inquiries and should train human resource personnel and employees participating in the interview or hire process on this new law. Employers should also take steps to ensure that any external recruiters with whom they work in identifying and vetting applicants, are apprised of this change in the law and implement its restrictions in all future dealings with applicants. If you have any questions about the implications of this legislation or if you would like assistance conforming your applications, pre-employment forms, and trainings, Reed Smith’s experienced employment attorneys are available to help.