Why it matters

New York joined the growing trend of states prohibiting employers from inquiring about wage history in a pair of executive orders issued by Governor Andrew Cuomo in early January. In an effort “to put New York on the fast track to eliminate the wage gap,” Executive Order 161 prohibits state entities from asking or mandating that an applicant “provide his or her current compensation, or any prior compensation history,” prior to making a conditional offer of employment with compensation. Applicants may still volunteer information about their compensation histories, however, and employers may request and verify compensation information after offering employment. Executive Order 162 applies to state contractors (and subcontractors), who must provide “detailed workforce utilization reports” including the job titles and salaries of each employee performing work on the contract. While the New York orders are limited to state agents and contractors, they demonstrate the continued movement toward banning consideration of payment history already enacted California and Massachusetts.

Detailed discussion

Joining the efforts to promote pay equity by President Barack Obama’s administration (including the new requirement that employers report salary data about workers as part of a modified Employer Information Report) and states such as California and Massachusetts, both of which prohibited employers from inquiring about wage history, New York Governor Andrew M. Cuomo signed two executive orders in January.

“Every New Yorker should have the opportunity to be fairly and equally compensated based on the nature and responsibility of the work that they do,” Executive Order 161 stated, referencing the 2015 law enacted by the state with the goal of equal payment in the workplace. “Despite recent advances, federal data shows that women in this state continue to earn an average of 87 cents on the dollar, or 13 cents less, compared to what men earn for performing the same work.”

To combat the uneven playing field, Gov. Cuomo ordered state entities—defined to include all agencies and departments over which the Governor has executive authority and all public benefit corporations, public authorities, boards and commissions for which the Governor appoints the Chair, the Chief Executive or the majority of Board Members, except for the Port Authority of New York and New Jersey—to stop asking for wage history.

“In order to promote consideration of applicants based on their unique aptitude and qualifications, no [s]tate entity is permitted to ask, or mandate, in any form, that an applicant for employment provide his or her current compensation, or any prior compensation history, until such time as the applicant is extended a conditional offer of employment with compensation,” according to the order.

Once a conditional offer of employment has been extended, a state entity may request and verify compensation information, and applicants can still volunteer compensation information. If a state entity is already in possession of an applicant’s prior compensation as of the effective date of the order, it shall not be relied upon in determining the applicant’s salary.

An applicant’s refusal to provide wage history cannot be considered in making an employment decision, and individuals that have been improperly asked for compensation information can report violations of the order to the Governor’s Office of Employee Relations.

Executive Order 162 follows a similar vein, noting that “the collection of additional information related to the compensation of individuals performing work on [s]tate contracts is critical to ensure that workers are being provided equal opportunities to work on [s]tate contracts and are being paid similarly for performing the same work.”

After June 1, 2017, state agencies and authorities must include a provision in all contracts, agreements and procurements “requiring contractors to agree to include detailed workforce utilization reports to include, in addition to the equal employment opportunity information, as is currently required to be included in such reports, the job title and salary of each employee of a contractor performing work on a [s]tate contract, or of each employee in the contractor’s entire workforce if the contractor cannot identify the individuals working directly on a [s]tate contract.”

The same requirement will be imposed on subcontractors as well.

Reports will be made on a quarterly basis for those contracts having a value in excess of $25,000, except for prime construction contracts with a value over $100,000, which will require monthly reports.

“State government has a responsibility to lead and ensure that [the existing] pattern of discriminatory wage practices is confronted and addressed and does not perpetuate in New York State,” according to Executive Order 162.

To read Executive Order 161, click here.

To read Executive Order 162, click here.