Salary History Ban Guidance Released in New York
Tags : Salary History Legislation
The state has issued guidance to employers to support compliance with the salary history ban that took effect January 6, 2020. The Guidance is availbale here.
New York's salary history ban ("Law") prohibits all New York State employers from making job or salary offers based on an applicant's wage history. The law also bans employers from requesting information regarding salary history as a condition of securing an interview, promotion or general employment. Additionally, employers may not seek wage history information from former employers. Employers are also banned from refusing to interview, hire or promote an individual based upon salary history; refusal to disclose salary history; and/or a complaint filed with the New York Department of Labor alleging violations of the Law.
Unlike many other salary history bans, this Law includes current employees in the terms noted above. As such, while an employer can reference an employee's current salary to calculate a raise, the employer may not ask about salary history of an employee's previous jobs. "Current employee" is defined as a currently employed individual of the employer, its parent company or any subsidiary.
One of the purposes of issuing the Guidance was to clarify whether employers could use voluntarily offered salary history to establish compensation. The Guidance clarifies that "if an applicant voluntarily and without prompting discloses salary history information, the prospective employer may factor in that voluntarily disclosed information in determining the salary for that person." As a follow-up, the Guidance specifically points out that "'optional' salary history inquiries on applications are considered prompting and do not meet the definition of "voluntary" in this instance. Furthermore, the Guidance explains that employers may not rely on voluntarily disclosed salary history information "to justify a pay difference between employees of different or various protected classes who are performing substantially similar work," as this would violate the State's Equal Pay Act.
The Guidance also clarifies that the term "salary history information" is inclusive of "compensation and benefits" and that the term "applicant" includes "part-time, seasonal and temporary workers, regardless of their immigration status." While salary history inquiries are banned per the Law, an employer is still permitted to ask an applicant about their salary expectations.
While the State of New York's law went into effect on January 6 of 2020, New York City has had a salary ban in place since October of 2017. A few critical differences between the two bans include:
- City Law does not apply to current employees; however, the State Law does.
- City Law permits employers to inquire about deferred compensation or unvested equity that an applicant would forego in accepting a new job. Employers may also ask about counteroffer values. These allowances are not permitted under the State Law;
- City Law covers "bona fide independent contractors, freelance workers, or other contract workers unless they are to work through an employment agency."
There are a number of actions employers in the State of New York should take in light of the enactment of this law. First and foremost, employers should review and revise (as needed) practices regarding hiring applicants and promoting current employees. The Guidance states that employers may wish to proactively add language in job postings stating that salary history disclosure will not be sought. Employers should also confirm that applications do not include optional fields for salary history disclosure and that interviewers do not prompt applicants or current employees to disclose this information. Should an applicant disclose salary history voluntarily, this information should be documented with a notation that the applicant offered the information of his/her own accord.
In utilizing the services of a placement agency, employers in the State of New York should connect with their agencies to ensure they are acting in compliance with the Law. Lastly, employers should take the time to develop and conduct training modules for HR staff and hiring managers regarding the Law, its implications and best practices on ensuring compliant procedures.
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