On April 5, 2017, the New York City Council passed an ordinance that amends the administrative code by prohibiting employers from inquiring about or relying on a prospective employee’s salary history. Mayor Bill de Blasio signed the ordinance on May 4, 2017, and it will go into effect 180 days from that date. The ordinance offers the rationale that, “the bill can reduce the likelihood that women will be prejudiced by prior salary levels and help break the cycle of gender pay inequity.” The ordinance makes it an unlawful discriminatory practice for employers to:
- Inquire about the salary history of an applicant for employment; or
- Rely on the wage history of an applicant in determining the salary, benefits, or other compensation for such applicant during the hiring process, including the negotiation of a contract.
Employers may discuss with the applicant their expectation with respect to salary, benefits, and other compensation, including but not limited to “unvested equity or deferred compensation that an applicant would forfeit or have cancelled by virtue of the applicant’s resignation from their current employer.” If the applicant voluntarily discloses their salary history, the employer may verify the applicant’s salary history and use the salary history to determine the applicant’s salary, benefits, and other compensation.
The ordinance does not apply to:
- Any action taken by an employer, employment agency, or employee or agent thereof, pursuant to any federal, state, or local law that specifically authorizes the disclosures or verification of salary history for employment purposes, or specifically requires knowledge of salary to determine an employee’s compensation;
- Applicants for internal transfer or promotion with their current employer;
- Any attempt by an employer, employment agency, or employee or agent thereof, to verify an applicant’s disclosure of non-salary related information or conduct a background check, provided that if such verification or background check discloses the applicant’s salary history, such disclosure shall not be relied upon for purposes of determining the salary, benefits, or other compensation of such applicant during the hiring process, including the negotiation of a contract; or
- Public employee positions for which salary, benefits, or other compensation are determined pursuant to procedures established by collective bargaining.
New York City is the second city in the country to ban employers from asking job applicants about their wage history in 2017, following in the footsteps of Philadelphia and the state of Massachusetts that passed similar legislation in 2016.
The new ordinance is accessible here for review:
- The ordinance applies to private sector employers in New York City.
- Employers in New York City may not seek compensation history from job applicants (with some exceptions).
- Employers may rely on the compensation history of the job applicant only when the applicant voluntarily discloses their wage history or when an exception explicitly permits it.