Q: What do New York employers need to know about the recent amendment to the state’s pay equity law?
A: In November 2015, New York became one of the first jurisdictions to pass a pay equity law that was more extensive than the federal equal pay laws. On July 10, 2019, Governor Cuomo signed an amendment to New York Labor Law Section 194, further expanding its scope.
Under the current law, employers are prohibited from paying an employee a lower rate than someone of the opposite sex for “equal work” that is performed under similar working conditions. The amended law makes it illegal for an employer to pay an employee less based on numerous characteristics in addition to sex. These additional protected characteristics include age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, and domestic violence victim status.
The amended law not only expands the current prohibition against gender-based pay inequity, but it also requires equal pay for “substantially similar work,” as opposed to the previous requirement of “equal” work. Specifically, it requires only a showing that employees are engaged in “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”
Employers should be aware that a violation of this law could result in an award to an employee of attorney’s fees and triple damages.
Importantly, the new pay equity legislation will still maintain four exceptions protecting employers from liability where employees do not receive equal pay for substantially similar work. These are where pay is based on a: (1) seniority system; (2) merit system; (3) system which measures earnings by quantity or quality of production; and (4) bona fide factor unrelated to protected class status (such as education, training or experience) that is job-related and consistent with business necessity.
This new legislation will take effect on October 8, 2019.
Next Steps for Employers
These developments follow the trend of the equal pay movement taking place in cities and states across the country. It is recommended that employers review their payroll to ensure that salaries, hourly rates, benefits and all forms of compensation are equal among employees performing substantially similar work. As a reminder, when evaluating what is “substantially similar work,” the focus should be on the job duties being performed and not simply on job titles.