NYC bans salary his­tory in­quiries

Sup­port­ers say the law is a step to­ward gen­der pay equal­ity


For New York City em­ploy­ers, it’s time to re­work those stan­dard in­ter­view ques­tions. On May 4, New York City Mayor Bill de Bla­sio signed a bill into law pro­hibit­ing em­ploy­ers from in­quir­ing about, or re­ly­ing on, a prospec­tive em­ployee’s salary his­tory.

Let’s take a closer look at what it means for hir­ing or­ga­ni­za­tions.

Specif­i­cally, the law makes it an “un­law­ful dis­crim­i­na­tory prac­tice” for em­ploy­ers to in­quire — in writ­ing or oth­er­wise — about the salary his­tory of a job ap­pli­cant, or to rely upon a job ap­pli­cant’s salary his­tory un­less the ap­pli­cant vol­un­tar­ily dis­closes the in­for­ma­tion to a prospec­tive em­ployer.

The salary his­tory ban is be­ing touted as a step to­ward elim­i­nat­ing gen­der pay in­equal­ity. It’s in­tended to fo­cus salary de­ci­sions in hir­ing upon an ap­pli­cant’s skill and abil­ity, and mar­ket com­pen­sa­tion for the role without con­sid­er­ing the ap­pli­cant’s prior salary, which po­ten­tially was de­flated due to dis­crim­i­na­tory, gen­der-based con­sid­er­a­tions.

Sup­port­ers of the law be­lieve it will stop per­pet­u­at­ing the dis­crim­i­na­tory gen­der-based salary gap for sim­i­larly-sit­u­ated job ap­pli­cants. Op­po­nents con­tend em­ploy­ers should not face blan­ket pro­hi­bi­tions on salary his­tory in­quiries, and wage dis­par­i­ties gen­er­ally, which may be based upon le­git­i­mate, non-gen­der based fac­tors such as prior job per­for­mance. The NYC ban con­tains two main pro­hi­bi­tions:

First, it is an un­law­ful dis­crim­i­na­tory prac­tice for em­ploy­ers to in­quire about a job ap­pli­cant’s salary his­tory (which in­cludes not only a cur­rent or prior wage, but ben­e­fits and all other forms of com­pen­sa­tion): (a) from an ap­pli­cant; (b) from the ap­pli­cant’s cur­rent or prior em­ployer; (c) from a cur­rent em­ployee, former em­ployee or agent of the ap­pli­cant’s cur­rent or prior em­ployer; or (d) by search­ing pub­licly avail­able records or re­ports for in­for­ma­tion on the job ap­pli­cant’s salary his­tory.

How­ever, an em­ployer is per­mit­ted to dis­cuss with an ap­pli­cant her or his ob­jec­tive mea­sures of pro­duc­tiv­ity (e.g., sales or rev­enue gen­er­ated), to dis­cuss the ap­pli­cant’s ex­pec­ta­tions as to salary, ben­e­fits and other com­pen­sa­tion and to in­form the ap­pli­cant about pro­posed or an­tic­i­pated salary or salary range.

Se­cond, it is an un­law­ful dis­crim­i­na­tory prac­tice for an em­ployer to rely on a job ap­pli­cant’s salary his­tory in de­ter­min­ing the ap­pli­cant’s com­pen­sa­tion at any stage of the em­ploy­ment process un­less the ap­pli­cant, un­prompted, will­ingly dis­closed her or his salary his­tory.

The NYC ban con­tains lim­ited ex­cep­tions in cir­cum­stances where ap­pli­ca­ble law au­tho­rizes the dis­clo­sure or ver­i­fi­ca­tion of salary his­tory for em­ploy­ment pur­poses, and also does not pre­clude em­ploy­ers from ver­i­fy­ing an ap­pli­cant’s non-salary in­for­ma­tion and con­duct­ing back­ground checks so long as any ac­com- pa­ny­ing dis­clo­sure of salary his­tory is not re­lied upon for pur­poses of de­ter­min­ing salary, ben­e­fits or other com­pen­sa­tion dur­ing the hir­ing process. Ad­di­tion­ally, the law is lim­ited to job ap­pli­cants, and does not fa­cially ap­ply to ex­ist­ing em­ploy­ees trans­ferred or pro­moted to new in­ter­nal po­si­tions.

New York City is among the first ju­ris­dic­tions to en­act leg­is­la­tion on salary his­tory in­quiries. Philadel­phia and Mas­sachusetts have in­tro­duced sim­i­lar bans, and it is widely ex­pected that a host of other cities and states will fol­low suit.

Speak­ing of suits, the Philadel­phia law has re­cently been chal­lenged by Philadel­phia’s Cham­ber of Com­merce, al­leg­ing a salary his­tory ban vi­o­lates busi­nesses’ First Amend­ment (free speech) rights without demon­strat­ing those em­ployer in­quiries ac­tu­ally per­pet­u­ate gen­der-based wage dis­crim­i­na­tion.

Al­though none of the NYC, Philadel­phia or Mas­sachusetts mea­sures have taken ef­fect yet, and de­spite the pos­si­ble le­gal chal­lenges ahead (many of which un­doubt­edly will fo­cus on the tug of war be­tween com­bat­ting gen­der-based dis­crim­i­na­tion and pre­serv­ing an em­ployer’s free speech rights), busi­nesses are fore- warned to pre­pare for the rip­ple ef­fect of this wave.

Like other pro­hib­ited em­ployer in­quiries that have gar­nered lo­cal and na­tional at­ten­tion — re­mem­ber the “ban the box” move­ment to elim­i­nate in­quiries about an in­di­vid­ual’s crim­i­nal his­tory? — the salary his­tory ban is gain­ing mo­men­tum.

New York City em­ploy­ers should im­me­di­ately re­view and re­vise their form ap­pli­ca­tions, in­ter­view pro­cesses (in­clud­ing train­ing of those con­duct­ing in­ter­views) and ref­er­ence and back­ground/credit check pro­ce­dures to en­sure the ques­tions and top­ics cov­ered do not im­pli­cate dis­clo­sure of an ap­pli­cant’s salary his­tory.

Non-NYC em­ploy­ers also should care­fully fol­low this trend to make sure they are not caught flat-footed in the event a sim­i­lar ban is im­posed in their ju­ris­dic­tion.

Ad­di­tion­ally, em­ploy­ers must co­or­di­nate with en­gaged out­side re­cruiters and place­ment firms to make sure they do not re­ceive unau­tho­rized dis­clo­sure of pro­hib­ited ap­pli­cant in­for­ma­tion.

Marc Zimmerman chairs the la­bor and em­ploy­ment law prac­tice at Phillips Nizer LLP.

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