Starting October 31, 2017, New York City employers will be prohibited from inquiring about a job applicant’s salary history, or from relying on that salary history in determining an applicant’s prospective pay, unless the applicant voluntarily offers the information.
What New York City Employers Cannot Do
Under the salary inquiry law, employers cannot, during an in-person interview that takes place in New York City, or in any circumstances where the impact will be felt in New York City:
- Communicate any question or statement to a job applicant, the applicant’s current or former employer, or a current or former employee who worked with the applicant, to obtain the applicant’s salary history;
- Search public records to obtain an applicant’s salary history; and/or
- Rely on an applicant’s salary history when making an offer of employment or deciding compensation, unless the applicant voluntarily and without prompting disclosed it.
What New York City Employers Can Do
New York City employers may consider and verify a job applicant’s salary history if:
- The job applicant discloses the information voluntarily and without prompting;
- Law specifically authorizes the disclosure or verification of salary history;
- The position’s salary is determined by procedures in a collective bargaining agreement;
- The applicant is a current employee applying for an internal transfer or promotion; and/or
- A background check for non-salary related information inadvertently discloses salary history, provided, however, that the employer does not rely on that inadvertently disclosed salary history in determining the job applicant’s prospective salary.
The Scope of One’s “Salary History”
- “Salary history” means current or prior wages, benefits or other compensation.
- It does not include objective measures of the applicant’s history of productivity. Employers may ask about sales performance or other objective indicators of performance like volume or value, but cannot ask about how these figures translated into wages.
- Employers may also discuss and consider the applicant’s salary and benefits expectations, including the amount of unvested equity and deferred compensation an applicant would forfeit from his or her current employer.
Consequences of Violating New York City’s Salary Inquiry Ban
The New York City Commission on Human Rights will investigate complaints and enforce the new law by imposing fines of up to $125,000 for unintentional violations, and up to $250,000 for intentional violations.
Tips and Next Steps for New York City Employers
- Update Your Company Policies, Job Application Materials, and Interview Guides
- It is not enough to add a disclaimer that individuals in New York City or applying for jobs located in New York City need not answer questions related to salary history.
- Develop a process for documenting when an applicant voluntarily discloses his/her salary history.
- Train your Recruiting and Hiring Personnel
- Develop a process for documenting the reasons for differentials in pay.
For questions on compliance with this new law or other employment and hiring requirements, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resource Training & Audit Practice Group, at email@example.com, or 973-533-0777.