Why it matters

Following in the recent footsteps of California, New York Governor Andrew Cuomo signed into law the Achieve Pay Equality Act, providing greater pay equity for women in the state. The bill—one of a package of eight laws that made up the Women's Equality Agenda—amended existing law from achieving pay from "any other factor other than sex" to "a bona fide factor other than sex, such as education, training, or experience." The bona fide factors must be job-related, consistent with business necessity, and cannot be based upon a sex-based differential in compensation. Further, the exception is not applicable when the employee can demonstrate that the practice causes a disparate impact on the basis of sex and that the employer rejected an alternative practice that would not have resulted in such an impact and still served the business purpose. The updated law—set to take effect January 19, 2016—also makes clear that employees are allowed to discuss wages with each other and bulked up the liquidated damages liability for employers to 300 percent of the total amount of wages found to be due. New York's measure appears to be even broader than California's recently enacted enhanced Fair Pay Act—touted as the toughest in the nation—given the increased damages and the potential for a disparate impact claim. Employers on both sides of the country should familiarize themselves with the new laws.

Detailed discussion

On October 21, Governor Andrew Cuomo signed into law a number of bills as part of his "Women's Equality Agenda." The eight new pieces of legislation ranged from protections against domestic violence and human trafficking to mandating reasonable accommodation for pregnant employees. "This State has a legacy of leading the way in advancing equal rights—and today, we are making New York a model of equality for women," Gov. Cuomo said in a statement.

Among the bills: an amendment to New York Labor Law Section 194 addressing pay equity. The new law made it tougher for employers to argue that different rates of pay are based on non-discriminatory reasons and established a disparate impact claim for employees, among other changes.

"No employee shall be paid a wage at a rate less than the rate at which an employee of the opposite sex in the same establishment is paid for equal work on a job the performance of which requires equal skill, effort and responsibility, and which is performed under similar working conditions," reads the law as amended.

The bill provided for limited exceptions for a seniority system, a merit system, a system which measures earnings by quantity or quality of production, and "a bona fide factor other than sex, such as education, training, or experience."

Previously, the law stated that employers could pay workers differently due to "any other factor other than sex." Section 194 was narrowed to include just "a bona fide factor," which may not be based upon a sex-based differential in compensation and must be job-related and consistent with business necessity.

In a major change, employers may also be liable under the statute if a plaintiff can demonstrate that the employer's differing pay rates causes a disparate impact on the basis of sex. Employees must show that the employer specifically rejected an alternative practice that would have served the business purpose without causing such an impact.

The amended law makes clear that employees are permitted to discuss wages with each other without employer retaliation. And it increased the liquidated damages liability for employers from 100 percent of the total amount of wages found to be due to 300 percent.

New York's new law takes effect January 19, 2016.

Just a few weeks prior, the state of California similarly enacted an updated equal pay law. While many of the provisions are alike—prohibitions on employers retaliating against workers discussing wages, limitations on the circumstances where an employer can show that wage disparity is based on a legitimate factor other than sex—the New York law seems to be even more employee-friendly than the California version.

To read A 6075, click here.