In November 2016, New York City enacted legislation prohibiting City agencies from inquiring into job applicants' salary history. On April 5, 2017, the New York City Council expanded the above-noted protections, overwhelmingly passing a bill prohibiting nearly all employers – including private sector employers – from inquiring into applicants' salary history. Reasoning that basing a salary offer on a prospective employee's prior salary can perpetuate unwarranted earnings imbalances between male and female employees, the new legislation seeks to combat systemic, gender-based wage disparities. If signed by Mayor de Blasio – which is widely expected – the law will go into effect six months from the date of signing.
In complying with this expected new law, employers must be mindful of the distinction between prohibited inquiries and permissible avenues of salary discussion. Specifically, employers would still be permitted to set forth a proposed salary for a given position and discuss that proposal with a prospective employee. Employers would also be permitted to inquire as to what a prospective employee hopes to earn should he or she receive a job offer. Finally, should an applicant voluntarily disclose his or her prior salary without any prompting or coercion, an employer may take this information into account in subsequent salary discussions. Notably, with limited exceptions, the anticipated new law also prohibits nearly all discussion of an applicant's prior benefits and other forms of compensation.
Employees who are improperly asked about their salary history would have the option of either bringing a complaint before the New York City Commission on Human Rights or proceeding directly with a lawsuit against the employer. Employers found liable for violations may be subject to substantial penalties.
In order to prepare for this likely-forthcoming law, New York City employers must advise their hiring personnel – and anyone else involved in the hiring process – that salary history inquiries must be avoided. Moreover, to the extent that job applications or other "onboarding" materials seek information about candidates' salary history, these documents must be revised. Employers should also be mindful that legislation regarding salary history inquiries is under consideration in various other states and cities. Thus, employers who conduct business in various locations may be well served to consider implementing a uniform "no salary history inquiry" policy.