New York's Salary History Law prohibits employers from inquiring about applicants' previous remuneration
Inquiries into salary history are now prohibited during the interview process in New York as part of efforts to bridge the gender pay gap. This article by Golenbock Eiseman highlights what you need to know about a growing trend in the U.S.
In what is becoming a growing trend in the United States, and potentially in other countries in the future, new legislation has been passed (effective since October 31, 2017) in New York City that prevents local employers from asking questions about an applicant's salary history.
Local Law No. 67 ('The Law') amends the New York City Human Rights Law to make inquiries into salary history off-limits and prevent prospective employers from relying on such information in determining the applicant's salary, benefits or other compensation.
By enacting the law, New York joins a growing number of states and cities that have passed similar legislation that aims to tackle the gender pay gap.
Lawyers at New York member firm Golenbock Eiseman Assor Bell & Peskoe comment: "The Law, permits, however, pre-employment discussions regarding the applicant's salary 'expectations', and permits an employer to consider an applicant's salary history if the applicant voluntarily discloses the information."
Penalties for non-compliance
The New York City Commission on Human Rights will enforce the Law and can impose a civil penalty of up to US$125,000 for an unintentional violation and up to US$250,000 for a willful violation. Aggrieved job applicants can also file a private cause of action against the employer who is in breach.
"Given the clear trend developing across the country, all employers (operating inside and outside of New York City) are advised to be aware of the Law and its impact on the hiring process, to keep advised of their local laws and to consider proactively changing their hiring practices."
To clarify the application of the Law, the New York City Commission has published answers to frequently asked questions ('Guidance' on the Salary History Law).
Read more commentary from the firm about the new salary history law.
- Employers must update their New York City job applications and/or related new hire packets to eliminate any request for prior salary information
- Employers should train hiring personnel and consider whether to implement a standardized script for hiring managers to navigate salary discussions
- Employers should revise handbook policies and company procedures to prohibit all inquiries into salary history during the hiring process
- Discuss the Law with any agents, recruiters, or headhunters involved in the recruitment process and instruct them to comply. Prior to engaging in any discussions about salary history with recruiters, employers should
request that the recruiter produce written consent from the job applicant
- In the event that an applicant discloses his or her salary history, employers should consider obtaining written documentation that he or she did so voluntarily and unprompted
- Consider the Law’s implications in an acquisition context and, where necessary, establish the proper firewalls to prevent hiring managers from learning salary information of target employees
- Multistate employers and out-of-city employers employing New York City residents should consider a uniform approach to the hiring process that is consistent with the Law’s requirements.