New York City Bans Employer Inquiries Into Salary History

On May 4, 2017, New York City Mayor Bill DeBlasio signed a law amending the New York City Human Rights Law, barring all public and private New York City employers from asking job applicants about their prior wages and salary history.  The law will take effect on Tuesday, October 31, 2017. The new law makes it an unlawful, discriminatory practice for an employer to inquire about or rely upon the salary history of a job applicant to determine their salary amount during the hiring process.

The salary inquiry law bans New York City employers from:

  • Making an inquiry, either verbally or in writing, to an applicant and/or the applicant’s current or prior employer, to obtain the applicant’s salary history;
  • Searching public records for an applicant’s salary history; and/or
  • Relying on a job applicant’s salary history when making an offer of employment or extending an employment contract to the applicant.

Salary history is broadly defined in the bill as the applicant’s “current or prior wage, benefits or other compensation.”  However, salary history inquiries do not include inquiries into the objective measure of the applicant’s productivity, for example, through inquiries on revenue, sales, or production reports.  Further, employers may still discuss the applicant’s salary and benefits expectations, including the amount of unvested equity and deferred compensation an applicant would forfeit through resignation from his or her current employment.

The law contains several other exceptions to the prohibition on salary inquiries, which include the following:

  • Employers can consider and verify an applicant’s salary history if the applicant discloses the information voluntarily and without prompting;
  • Where federal, state, or local law specifically authorizes the disclosure or verification of salary history;
  • Where salary is determined by procedures in a collective bargaining agreement;
  • When current employees are transferred or promoted within the company; and
  • When a background check for non-salary related information inadvertently discloses salary history, provided the employer does not rely on that information in making an offer of employment.

The New York City’s Commission on Human Rights (NYCCHR) will be responsible for investigating complaints and enforcing the new law.  The NYCCHR will also have the authority to impose fines ranging from up to $125 for intentional violations and up to $250,000 for intentional malicious violations.

New York City employers must start to update their employment applications and train their recruiters and human resources personnel on the new requirements to ensure compliance by the October 31, 2017 deadline.  Employers may also be forced to limit the scope of their background checks and revise their notices under the Fair Credit Reporting Act.

For questions on this new law, background check laws, or other employment and hiring requirements, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resource Training & Audit Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

New York City Seeks to Ban Employer Inquiries Into Applicants’ Salary History

On April 5, 2017, the New York City Council passed a law amending the New York City Human Rights Law, barring all public and private New York City employers from asking job applicants about their prior wages and salary history.  The bill has been sent to Mayor DeBlasio for signature.  This new proposed law will take effect 180 days after Mayor DeBlasio signs it.

This bill would prohibit New York City employers from:

  • Making an inquiry, either verbally or in writing, to an applicant and/or the applicant’s current or prior employer, to obtain the applicant’s salary history;
  • Searching public records for an applicant’s salary history; and/or
  • Relying on a job applicant’s salary history when making an offer of employment or extending an employment contract to the applicant.

Salary history is broadly defined in the bill as the applicant’s “current or prior wage, benefits or other compensation.”  However, salary history inquiries do not include inquiries into the objective measure of the applicant’s productivity, for example, through inquiries on revenue, sales, or production reports.  Further, employers may still discuss the applicant’s salary and benefits expectations, including the amount of unvested equity and deferred compensation an applicant would forfeit through resignation from his or her current employment.

The bill contains several other exceptions to the prohibition on salary inquiries, which include the following:

  • Employers can consider and verify an applicant’s salary history if the applicant discloses the information voluntarily and without prompting;
  • Where federal, state, or local law specifically authorizes the disclosure or verification of salary history;
  • Where salary is determined by procedures in a collective bargaining agreement;
  • When current employees are transferred or promoted within the company; and
  • When a background check for non-salary related information inadvertently discloses salary history, provided the employer does not rely on that information in making an offer of employment.

The New York City’s Commission on Human Rights (NYCCHR) will be responsible for investigating complaints and enforcing the new law.  The NYCCHR will also have the authority to impose fines ranging from up to $125 for intentional violations and up to $250,000 for intentional malicious violations.

If Mayor DeBlasio signs this law, employers must immediately update their employment applications and train their recruiters and human resources personnel on the new requirements.  Employers may also be forced to limit the scope of their background checks and revise their notices under the Fair Credit Reporting Act.  For questions on this new proposed law, background check laws, or other employment and hiring requirements, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Philadelphia Becomes First U.S. City to Prohibit Inquiries into Applicants’ Wage Histories

On January 23, 2017, Philadelphia Mayor Jim Kenney signed into law the “Wage History Ordinance,” which bans all employers doing business in Philadelphia from asking job applicants about their wage histories, subject to a few exceptions. The Ordinance, unanimously passed by the Philadelphia City Council on December 8, 2016, amends Chapter 9-1100 of the Philadelphia Code, the “Fair Practices Ordinance.” The new law, the first for a U.S. city, will take effect on Tuesday, May 23, 2017.

The Wage History Ordinance specifically prohibits employers from the following:

  • To inquire about, require disclosure of, or condition employment or consideration for an interview on the disclosure of a potential employee’s wage history, unless done pursuant to a “federal, state or local law that specifically authorizes the disclosure or verification of wage history for employment purposes;”
  • Determine a potential employee’s wages based upon his/her wage history provided by his/her current or former employer, unless the potential employee “knowingly and willingly” disclosed such information to the prospective employer; and/or
  • Take any adverse action against a potential employee who does not comply with a wage history inquiry (anti-retaliation provision).

For purposes of this Section 9-1131, “to inquire” shall mean to “ask a job applicant in writing or otherwise,” and “wages” shall mean “all earnings of an employee, regardless of whether determined on time, task, piece, commission or other method of calculation and including fringe benefits, wage supplements, or other compensation whether payable by the employer from employer funds or from amounts withheld from the employee’s pay by the employer.”

Notably, the exception allowing wage history inquiries where a law “specifically authorizes” such applies not only when the inquiry is required by law, but when it is merely permitted by law.

The new law also requires a prospective employee who alleges a violation of the Ordinance to file a complaint with the Philadelphia Commission on Human Relations within 300 days of the alleged discriminatory act before he/she may file a civil action in court. Violations of the Ordinance can result in an award of injunctive or other equitable relief, compensatory damages, punitive damages (not to exceed $2,000 per violation), reasonable attorneys’ fees and hearing costs.

Advocates of the legislation, like Philadelphia Councilman Bill Greenlee, have suggested that the Ordinance is aimed at reducing the gender wage gap.  According to the “Findings” section of the Ordinance, women in Pennsylvania are paid 79 cents for every dollar that a man earns.  Amongst minorities, it claims that African-American women are paid 68 cents, Latinas are paid 56 cents, and Asian women are paid 81 cents for every dollar paid to men.  The belief is that, since women have historically been paid less than men, an employer’s knowledge of applicants’ wage histories can perpetuate a cycle of lower salaries.  Advocates profess that the Ordinance forces prospective employers to, instead, set salaries based on an applicant’s experience and the value of the position to the company.

Opponents of the Ordinance, like Rob Wonderling, CEO of the Chamber of Commerce for Greater Philadelphia, denounce it as an unnecessary “hassle” driving businesses away from Philadelphia.  Corporations like Comcast have also threatened costly lawsuits contesting the legality of the Ordinance.

It is recommended that employers review their hiring practices and applications for employment in advance of the Wage History Ordinance’s effective date of May 23, 2017.  Moreover, anyone involved in the hiring and interview process must be trained to ensure compliance with the new law prohibiting inquiries into an applicant’s salary history.

For more information on the Wage History Ordinance, how it may affect your business, or ways to ensure that your company’s hiring documents and policies comply with the Ordinance, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.