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New York City Bans Employer Inquiries Into Applicants’ Salary History

May 10, 2017

Experienced human resources professionals and job interviewers are familiar with a number of questions that should be avoided in a job interview or on an employment application. It’s well known that employers should generally not ask applicants direct or indirect questions about (among other things) their racial, ethnic, or religious background, or their marital status, sexual orientation, disability or illness. In addition, in a growing number of jurisdictions, inquiries into an applicant’s consumer credit history are generally inappropriate, and successful legislative efforts to “ban the box” have also made it illegal in many places (and under most circumstances), to inquire into an applicant’s criminal history until after a conditional offer of employment has been made.

Last week, the City of New York added another question to that list, joining Philadelphia and Massachusetts as the third jurisdiction to ban inquiries into an applicant’s salary history.

The new law, which was signed by Mayor De Blasio last week, and which goes into effect on October 31, 2017, will make it an unlawful discriminatory practice for private employers to ask an applicant about his or her prior wages, benefits or other compensation.  It will also be illegal to make any inquiry of a former employer, or to search public records, for the purpose of uncovering an applicant’s salary history.  It is also generally illegal under this new law for New York City employers to rely on an applicant’s salary history in determining the compensation for such applicant during the hiring process.

The new law does not prohibit a prospective employer from discussing an applicant’s expectations with respect to salary and benefits.  It also does not prohibit an employer from seeking to confirm salary history, or from relying on such salary history in determining compensation, if the applicant had voluntarily, and without prompting, disclosed his or her salary history.  The law also does not apply to applicants for internal transfer or promotion with a current employer, and it does not bar background checks or attempts to verify non-salary related disclosures that incidentally result in the disclosure of an applicant’s salary history.  However, such incidentally disclosed salary information can not be relied upon in determining the applicant’s compensation.

Aggrieved applicants may file a complaint with the New York City Commission on Human Rights, which has the authority under the New York City Administrative Code to assess compensatory damages, and in an extreme case involving willful, wanton or malicious conduct, to assess a civil penalty of up to $250,000.

Proponents of the new law, which is intended to combat persistent pay disparity on the basis of gender and race, expect that it will be challenged in court.  Indeed, a similar law on the books in Philadelphia is currently being challenged by that city’s Chamber of Commerce on First Amendment grounds.  Nonetheless, as the prospects for these legal challenges aren’t certain, employers would be well advised to be prepared to comply with this law when it goes into effect.

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