NYC Pay History Ban to Take Effect October 31, 2017

On May 4, 2017, the Mayor of New York City, Bill de Blasio, signed into law a bill that amends the New York City Human Rights Law (the “NYCHRL”), and makes it illegal for employers to inquire about a prospective job applicant’s salary history or to rely on that history during the hiring process. Cole Schotz previously blogged about the proposed legislation on April 7, 2017.  The text of the new law can be found by clicking here. The law will take effect 180 days from the date of signing, October 31, 2017.

The amendment to the NYCHRL prohibits an employer, an employment agency, and an employer’s agent or employee, from making inquiries regarding the salary history of an applicant unless certain limited exceptions in the law apply.  The amendment defines the term “inquiry” broadly to include not only communicating a question to an applicant or his/her current or former employer about such salary history, but also includes searching publically available records or reports to obtain an applicant’s salary history.  The law authorizes the New York City Human Rights Commission to take such actions “as are necessary to implement” the law prior to the effective date.

As noted above, there are limited carve outs in the law regarding when salary history may be discussed.  Critically, use of the term “salary history” under the amendment does not prohibit telling the applicant what the salary or salary range is for the position, and also does not prohibit the employer from inquiring about “objective measures of the applicant’s productivity” such as sales or revenue production attributable to the employee.   Likewise, an employer is permitted to engage in discussions with the applicant “about their expectations with respect to salary, benefits and other compensation, including, but not limited to unvested equity or deferred compensation,” which may be forfeited by the applicant by virtue of resigning from his/her current employer.  Additionally, an applicant can voluntarily disclose his/her salary history to an employer, without prompting, in which case the salary history may be considered by the employer in determining salary, benefits and other compensation, and may also be verified by the employer.  The amendment to the NYCHRL also will not apply where the disclosure or verification of salary history is required pursuant to Federal, State or local law, or in the case of internal transfers or promotions.

Employers should inform all employees and agents, including, but not limited to, their human resources professionals and recruiters, of the amendment to the NYCHRL, to ensure compliance by October 31, 2017.  Employers should also be mindful to appropriately “revamp” all employment applications and hiring materials to omit any reference to salary history.