The New York City Council has passed a measure that would bar all private employers from asking about or relying on salary history during the hiring process, and Mayor Bill de Blasio is expected to sign it into law. Assuming he does so, the law will become effective within 180 days of his signing – roughly, October 2017.
Massachusetts, Puerto Rico, and the city of Philadelphia have enacted similar laws.
Here are the key provisions of the New York City law:
- Employers are prohibited from inquiring about or relying on the salary history of an applicant when “determining the salary, benefits or other compensation for such applicant during the hiring process, including the negotiation of a contract.”
- The term “to inquire” encompasses any question directed at an applicant, or current or former employer of the applicant (including the employer’s employee or agent), or a search of public records.
- The term “salary history” includes an applicant’s prior wages, benefits, or other compensation. It does not include objective measures of the applicant’s productivity, such as revenues, sales, or other production reports.
- There are two main exceptions under the law:
- An applicant can make a voluntary and unprompted disclosure of his or her salary history.
- The employer can discuss with the applicant expectations about salary, benefits, and other compensation. This includes compensation that the applicant would forfeit if he or she left the current employer.
- The law does not apply to employers acting under any federal, state, or local law requiring disclosure of salary history, or to current employees applying for internal transfer or promotion.
- The law contains a private right of action, meaning applicants can file lawsuits against employers for damages. The law also gives the New York City Commission on Human Rights power to issue a $125 fine for an “intentional violation” of the law and a fine of up to $250,000 for an “intentional malicious” The Commission also has the authority to promulgate rules further interpreting the law.
Although business groups will probably challenge the law in court, New York City employers should still prepare for it by removing salary history questions from applications, instructing interviewers not to ask about salary history, and altering verification policies to prohibit disclosure of salary history to inquiring prospective employers.