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Employment Alert: New York’s City’s Pay Inquiry Law Takes Effect October 31, 2017

October 20, 2017

As previously advised, starting October 31, 2017, employers in New York City are prohibited from asking a job applicant’s salary history during the hiring process. The new law makes it an “unlawful discriminatory practice” to inquire about or rely upon an individual’s salary history, unless the applicant offers the information voluntarily.   Here is a list of things every employer should know:

 

WHO IS COVERED? 

  •  Most applicants interviewing and applying for new employment in NYC as:  

    • a full or part-time employee 

    • a full or part-time intern 

    • independent contractors (who do not have their own employees) 

    • NOTE: If an employer conducts an interview outside of NYC (i.e., New Jersey, Connecticut) for a New York City based job, the law applies. 

 

WHO IS NOT COVERED?

  • Applicants applying for an internal transfer or promotion with their current employer.

  • Applicants for positions with public employers for which compensation is set pursuant to a collective bargaining agreement. 

 

WHAT IS PROHIBITED?

  • Employers cannot:

    • Ask questions about or solicit information about an individual’s current or prior earnings or benefits (i.e., job applications, surveys or any other documents). 

    • Ask the applicant’s current or former employers or their employees about the applicant’s current or prior earnings or benefits.

    • Search public records to learn about the applicant’s  current or prior earnings or benefits.

    • Rely on information about an applicant’s current or prior earnings or benefits to set compensation. 

 

WHAT IS NOT PROHIBITED?

  • Employers can:

    • Make statements about the anticipated salary, salary range, bonus, and benefits for a position.

    • Inquire about the applicant’s expectations or requirements for salary, benefits, bonus, or commission structure. 

    • Ask about objective indicators of applicant’s work productivity in that applicant’s current or prior job such as revenue or profits generated, sales, production reports, or books of business.

    • Make inquiries to an applicant’s current or former employers or search online to verify non-salary information. 

    • Make inquiries about an applicant’s current or prior earnings or benefits that are authorized or required by federal, state or local law.

    • Verify income (only if applicant voluntarily provides it during the interview process)

 

HOW IS SALARY DEFINED?

  • Salary should be interpreted broadly and includes more than base salary (e.g., car allowance, retirement plan, bonuses are also deemed to be part of salary or compensation)

  • Amount of commission earned 

  • Profit Percentage 

 

ENFORCEMENT OF THE LAW:

  • The law will be enforced by the New York City Commission on Human Rights (the “Commission”). Individuals may also bring a civil lawsuit for violations of the law. 

  • The Commission may impose a civil penalty of up to $125,000 for an unintentional violation, and up to $250,000 for a “wilful, wanton or malicious” violation.

  • Employers could be subject to liability and damages, including back pay, compensatory damages, and attorneys’ fees. 

 

EMPLOYER’S NEXT STEPS:

 

In anticipation of this new law, employers should carefully review and revise, if necessary, written policies and protocols to ensure any prohibited inquiries, as stated above, are removed from internal and external documents.   Also, employers need to educate all persons involved in the hiring process that they should not be making any of the prohibited inquiries during the interview process.  We are also recommending that employers amend their employee handbooks/manuals consistent with the new law and affirmatively state the employer’s intention to comply with the terms of this new law.  Finally, employers need to be aware that other jurisdictions are in the process of implementing similar laws and, accordingly, they may need to adjust their policies and practices accordingly.  Thus, at the moment, Massachusetts, Philadelphia, Delaware and Oregon have passed similar legislation. Please feel free to contact us if you have any questions or require further information.  

 

 

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