New York City will soon become the third jurisdiction to enact laws barring employers from asking a job applicant about former salaries. The goal? To eliminate one of the alleged sources of wage disparities between men and women in the workforce. NYC’s actions come on the heels of legislation in Massachusetts and Philadelphia.

The new bill, approved by the New York City Council, will amend the New York City Human Rights Law and make it illegal for an employer to inquire about the salary history of a prospective employee. The new bill will also make it illegal for an employer to base a potential employee’s salary on his or her salary history unless the potential employee volunteers the salary information. The new law will go into effect 180 days after it has been signed into law by the New York City Mayor, who has already expressed his support for the bill.

What You Can’t Do in NYC

Under the new law, an employer will be barred from:

  • Asking questions relating to a potential employee’s prior salary. Period. You can’t ask the applicant, the applicant’s current/former employer, or any current/former agent or employee of the former employer; and
  • Searching for former salary, benefits, or other compensation information through any publicly available source.

What You Can Still Do in NYC

Even under the new bill, a potential employer is allowed to:

  • Consider salary, benefits, and other compensation information if an applicant reveals this information voluntarily and without prompting; and
  • Discuss expectations regarding salary, benefits, or other compensation.

Penalties include a fine of up to $125,000 for an unintentional violation of the law and a fine of up to $250,000 for a “willful, wanton or malicious” violation. If a potential employee brings a civil lawsuit, then he or she will be eligible for back-pay, compensatory damages, and attorneys’ fees as well.

What to Do

Employers should start reviewing their policies and procedures now in order to eliminate any questions regarding salary history. Employers should also ensure that the human resources department and any employees who conduct interviews know not to raise the subject of an applicant’s current or former salary, benefits, or other compensation. You may want to train interviewers on what to do if an applicant volunteers prior salary information—to make sure that same applicant doesn’t later claim he or she was prompted to do so. Finally, you probably want to beef up your recordkeeping on why you didn’t hire someone so it is clearly not related to their prior salary or refusal to provide it.