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By Douglas Lipsky

Various jurisdictions have recently enacted employment laws to curb wage disparities and promote fair hiring practices. One notable regulation gaining traction is the salary history ban, which prohibits employers from inquiring about candidates’ previous compensation during the hiring process. 

New York City is spearheading this movement, having implemented its version of the ban to empower job seekers in January 2020. By removing the requirement to disclose salary history, this legislation fosters a more equitable environment where individuals are evaluated based on their qualifications and merit rather than past earnings. Let’s take a look at the impact of salary bans on job seekers and employers.

How Salary History Bans Help Job Seekers

Salary history bans in New York City have reshaped the dynamics of employment negotiations and fostered a fairer playing field. These regulations benefit job seekers in several ways:

  • Breaking the cycle of wage discrimination: Salary history bans help to disrupt the perpetuation of unequal pay practices based on past earnings, allowing individuals to negotiate from a position of equality.
  • Empowerment in negotiations: Without the burden of disclosing previous salaries, job seekers can confidently advocate for their worth and negotiate compensation packages that accurately reflect their skills and experience.
  • Ensuring fair compensation: By eliminating reliance on salary history, employers are encouraged to offer salaries aligned with market rates and the position’s value, securing fair compensation for job seekers.
  • Addressing wage gaps based on gender and race: Salary history bans contribute to closing the gender and racial wage gaps by removing a factor that historically perpetuated disparities in pay.

In essence, salary history bans empower job seekers to assert their value in the employment market and strive for fair compensation reflective of their qualifications and contributions. 

Challenges Faced By Employers

Employers in New York City are confronted with several challenges in complying with salary history bans, requiring adjustments to traditional hiring practices and careful compliance measures. Key challenges for employers include:

  • Adjusting hiring practices: Employers must revamp their recruitment processes to comply with salary history bans, which may entail restructuring interview protocols and reevaluating candidate evaluation criteria.
  • Ensuring compliance with the law: Staying abreast of evolving regulations and ensuring adherence to legal requirements regarding salary inquiries presents a significant challenge for employers, requiring ongoing education and training.
  • New strategies for evaluating candidates: Employers must develop alternative methods for assessing candidate qualifications and determining appropriate compensation, such as focusing on skills assessments, experience, and market benchmarks.
  • Mitigating potential legal risks: Failure to comply with salary history bans can result in legal repercussions, including fines and lawsuits, necessitating diligent risk management strategies and legal counsel.

Despite these challenges, employers can foster a more equitable and merit-based hiring process and contribute to a fairer and more inclusive workplace environment. By embracing the principles of transparency and fairness, employers can adapt to the evolving regulatory landscape and position themselves as champions of equal opportunity and diversity in the workforce.

How Employees Can Protect Their Rights

To safeguard their rights in light of salary history bans, employees can take proactive steps to ensure fair treatment and compensation:

  • Conduct salary research: Arm yourself with knowledge about market rates for your position and industry to negotiate effectively.
  • Reframe discussions during interviews: Politely deflect inquiries about salary history and redirect the conversation toward your qualifications and the value you bring to the role.
  • Focus on qualifications and market value: Emphasize your skills, experience, and achievements during interviews to demonstrate your worth independent of past salaries.

Employees can assert their rights, advocate for fair treatment, and contribute to a culture of transparency and equality in the workplace by taking these measures.

The Bottom Line of Salary History Bans

By embracing transparency, advocating for fair compensation, and staying informed about evolving regulations, businesses can create workplaces where merit and qualifications are the primary determinants of success. Talk to an employment lawyer about how to navigate New York City’s salary history ban.

About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.