New York City Updates Their Salary History Ban

By Michael Klazema on 11/14/2017

The New York City Commission on Human Rights (Commission) issued a guidance to assist employers in understanding the New York City’s Salary History law, which has been effective since October 31, 2017. The purpose of this article is to highlight some of the most important new rules. As previously stated in our prior May 11, 2017 compliance article, “It is 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 others compensation for such applicant during the hiring process, including the negotiation of a contract.”

Law Coverage 

According to the guidance, this salary history ban applies to employers of any size that are hiring job applicants in New York City. The guidance states that if a discriminatory practice occurs outside of New York City, “there could be jurisdiction if the impact of the unlawful discriminatory practice is felt in New York City.”

The law does not apply to:

  • Internal transfer or promotion with their current employer;
  • Applicants for public sector jobs for which salary is governed by a collective bargaining agreement; and
  • People, including former employers, who disclose information about salary history to the hiring employer.

What Employers Can and Cannot Do to Learn about Applicants’ Salary Expectations

The employer’s job application can request information about the applicant’s compensation expectations or demands but not the applicant’s salary history. If the employer unintentionally discovers the applicant’s salary history through public search or background check, the employer will not be found liable, but cannot rely on the information in determining what to offer the applicant in salary, benefits, and other compensation.

The law allows employers to:

  • Inquire about objective indicators of an applicant’s productivity which can include expectations concerning revenues or sales attributable to the applicant; and
  • Discuss whether the applicant will be forfeiting equity or deferred compensation by taking the position.

If an applicant voluntarily discloses their salary history without prompting, the employer can discuss and inquire about the applicant’s history, verify the applicant’s representations, and rely on the applicant’s salary history in determining an offer. The guidance clarifies that a voluntary disclosure of salary history is “without prompting” when the applicant does not “think that the employer encouraged the disclosure based on the overall context and the employer’s words or actions.”

The guidance reminds employers to take into consideration of the NYC Human Rights Law when conducting background checks for criminal and credit history. Specifically, “In circumstances where an employer is legally permitted to perform a background check before a conditional offer has been made, or decide to run a background check after a conditional offer, the Commission recommends that employers specify to reporting agencies the information about salary history be excluded from the report.”

Definition of Compensation
The guidance gives a broad definition of the terms “benefits” and “other compensation” as it includes car allowance, retirement plan, or bonuses. Employers cannot ask about commissions an applicant earned or ask about the applicant’s current or former profit percentage.

Noncompliance Penalties 
The Commission enforces civil penalties for violations in amounts of up to $125,000 for an unintentional violation and up to $250,000 where the violation is willful and malicious.

Best Practices
The guidance made the following suggestions for employers regarding the law:

  • During the hiring process, focus questions on applicants’ salary demands, skills, and qualifications;
  • Ensure that job applications and other forms do not include a question about applicants’ salary history, even if such questions are framed as “voluntary;” and
  • Modify written policies and educate interviewers and hiring staff to prohibit inquiries about applicants’ salary history.

Tag Cloud
Recent Posts

Latest News

  • August 10 Moore Advanced teamed up with to secure the best possible hires. Read more about how this process has assisted them.
  • August 10 An adjudication withheld is a court agreement that doesn’t qualify as a conviction but can make matters confusing for individuals applying for jobs. Should you disclose a withheld adjudication to a prospective employer?
  • August 09 With adults now legally using recreational marijuana in numerous states, and with additional legalization efforts in the wings, expungement of old and minor drug-related convictions is more important than ever.
  • August 07 A West Virginia TV station is pushing the state’s Child Protective Services and Department of Health and Human Services to answer questions about background check policies. A CPS employee was recently charged with contributing to the delinquency of a minor, domestic assault, and threatening a police officer.
  • August 02 Woes continue for ridesharing companies struggling to keep riders safe after a man, illegally in the United States, was arrested and accused of several rapes dating back years.
  • July 31 South Carolina legislators recently passed a new law that will change the language of the state’s expungement policy. The new law will make expungement possible for repeat offenders. The previous law only allowed first offenses to be scrubbed from the public record.
  • July 26

    Hawaii employers have been banned from asking job applicants about their salary history. The new act’s effective date is January 1, 2019, and covers all employers that have at least one employee in that state.

  • July 26

    The expansion of the The North Carolina Certificate of Relief  Law, offers relief to jobseekers. An employer may take into consideration a certificate of relief despite the applicant’s criminal past; however, the certificate is not an expungement or pardon.

  • July 26

    With growing concerns about liability, businesses are transitioning away from one-time background checks in favor of continuous checks. The results are impacting both employers and employees.

  • July 25 Uber is officially launching a new ongoing criminal monitoring policy for drivers. The company started rolling out the new system in early July and will expand it in the months to come.