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An amendment to the New York Labor Law went into effect on January 6, 2020, prohibiting private and public employers in the state from relying on or inquiring about salary history in employment and compensation decisions. A similar ban became effective in New Jersey as of January 1, 2020. The best way for employees and employers to understand their rights and responsibilities regarding salary history inquiries is to consult an experienced employment law attorney.
The Backdrop of this Ban on Salary History Inquiries
Currently, 18 states and a number of municipalities have salary history plans in place. Advocates of pay equity believe that salary history inquiries discriminate against women and minorities by forcing them into lower salary levels, which perpetuates pay disparities. In 2017, New York Governor Andrew Cuomo signed legislation barring salary history inquiries by state government employers. The City of New York followed suit by banning such inquiries in 2018.
Under the amended New York Labor Law, all private and public employers in the state are now prohibited from inquiring about salary history in employment decisions. In particular, employers cannot rely on an applicant’s salary history in considering whether to offer employment or in determining the wages or salary of that individual.
This means that employers cannot request the salary history from an applicant or current employee as a condition of being interviewed or as a condition of employment or promotion.
It is permissible to consider the current salary histories of employees when determining compensation in connection with promotions, however.
In addition, it is also unlawful for employers in New York to refuse to interview, hire or promote an applicant based on prior wage or salary history or to retaliate against an applicant or current employee who files a complaint over an alleged violation of the salary inquiry ban.
New Jersey also enacted its own salary history inquiry ban by making it unlawful for employers to screen job applicants based on their salary history (e.g. prior wages, salaries or benefits) or to require that an applicant’s salary history satisfy any minimum or maximum criteria.
It is important to note that applicants and employees in both states are still permitted to voluntarily disclose their salary history, including for purposes of negotiating compensation; however, employers may take that into consideration and also take steps to verify the information.
Why This Matters
Whether banning salary history inquiries will eliminate wage disparity remains to be seen. In the meantime, it is crucial for employers in New York and New Jersey to ensure that existing hiring practices are in compliance with these new laws. Employers should review job applications, pre-employment forms, and hiring manuals to ensure such documents do not contain requests for salary history. Moreover, those who conduct interviews should be advised of the new requirements. Finally, applicants and employees now have the right to sue an employer for violations of salary history bans to recover lost wages, attorneys’ fees, and other damages.