New York City Passes Legislation to Ban Pay History Questions During Hiring Process

April 10, 2017 | Employment & Labor

On April 5, 2017, New York City Council approved a bill that bans employers from requesting or using job applicants’ salary history when making hiring decisions. This latest development follows trend of the pay-equity movement taking place in cities and states nationwide.  It is also the latest in a series of legislative measures in New York City that impose much more stringent regulations on the hiring process.

The law applies to all employers, both public and private. It is slated to go into effect 180 days after it is signed. We expect that it will be signed by Mayor de Blasio without delay, which would put bill on a track for implementation in October 2017.

The law aims to address the gender pay gap by not only prohibiting employers from asking candidates about their salary history, but also by making it illegal to ask a candidates’ current or former employer about the candidate’s salary. Employers are also barred from accessing public records for an applicant’s salary information. However, the restrictions do not apply under certain circumstances, namely when 1) an applicant volunteers the information; 2) when the company is considering the hiring of internal candidates for different positions; or 3) when considering workers who are covered by a collective bargaining agreement.

Proponents of the law champion it as a way to eliminate the “pay gap,” arguing that an employer’s use of an applicant’s previous salary history could lead to gender-based wage discrimination under the theory that applicants would be paid based on their past earnings, rather than what they would be offered if judged on a blank slate. Many others criticize the bill because they believe that it will not eliminate any wage gap but will instead create greater reliance on salary negotiation.  It is very likely that one or more business advocacy groups will mount legal challenges to undermine or delay implementation of the law.

The New York City Commission on Human Rights, the agency charged with investigating claims of discrimination in the five boroughs, will be enforcing the measure. The Commission will investigate complaints lodged against employers who allegedly violate the law and has the authority to impose fines ranging from $125 for unintentional violations up to $250,000 for an intentional malicious violation.

We expect that state and local governments will continue to enact new laws to protect workers’ rights in response to decreased enforcement at the federal level.  Employers in certain jurisdictions, including New York State and New Jersey, should continue to monitor these developments carefully.

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