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New York City Local Law Int. No. 1253-A (now Local Law 67) prohibits an employer from inquiring or relying upon a job applicant’s salary history during all stages of the employment process.  The intention of the law is to reduce gender pay inequity, which may be perpetuated by the disclosure of previous salary levels.  New York City employers should inform and educate all employees, agents, human resource professionals, and recruiters about the new law so they may execute any policy or procedure updates prior to the law’s effective date of October 31, 2017.

There are two important definitions in the law that explain what type of conduct constitutes an “inquiry,” as well as what constitutes “salary history.”  The definition of an inquiry is quite broad and employers should err on the side of caution.  It is vital for employers and any relevant personnel to become familiar with both definitions.

To inquire means to, “communicate any question or statement to an applicant, an applicant’s current or prior employer, or a current or former employee or agent of the applicant’s current or prior employer, in writing or otherwise, for the purpose of obtaining an applicant’s salary history, or to conduct a search of publicly available records or reports for the purpose of obtaining an applicant’s salary history.”

Salary history includes the applicant’s current or prior wage, benefits, or other compensation.  It does NOT include any objective measure of the applicant’s productivity, such as revenue or sales history.

 

Permitted Practices and Exceptions:

  • If an applicant makes an unprompted and voluntary disclosure of salary history to the prospective employer, the employer may consider salary history in determining the prospect’s salary, benefits, and other compensation, or to verify salary history.
  • An employer, without inquiring about salary history, may discuss salary, benefits, and other compensation expectations with the applicant.
  • Employers may also discuss any unvested equity or deferred compensation the applicant would forfeit by resigning from their current position.
  • Should an employer attempt to verify an applicant’s non-salary-related information or conduct a background check that results in disclosure of salary history, the employer is prohibited from relying on the salary information to determine compensation of any kind.

 

The Law does NOT apply to:

  • Actions taken by an employer, employment agency, or employee or agent thereof pursuant to any federal, state or local law that specifically authorizes the disclosure or verification of salary history for employment purposes, or specifically requires knowledge of salary history to determine an employee’s compensation.
  • Current employees applying for an internal promotion or transfer.
  • Public employee positions for which salary, benefits or other compensation are determined pursuant to procedures established by collective bargaining.

 

Action Items for New York City Employers:

  • Employers should inform all human resource professionals, recruiters, and relevant employees and agents about the new law and provide any necessary training.
  • All appropriate personnel should become familiar with the law, including but not limited to, lawful vs. unlawful questions by interviewers and voluntary disclosures by applicants.
  • Employers should review and make all necessary changes to their hiring practices and procedures.
  • All questions about salary history must be removed from job applications, background checks, and any other verification inquiries or documentation.
  • Employers should complete all necessary internal education and procedural changes prior to the law’s effective date of October 31, 2017.

 

Additional Information:

The full text of the Local Law can be found here.

 

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Joanna Castillo– Joanna is the Client Compliance Manager for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Joanna enjoys live music, college football, travel, and walking her dog in Golden Gate Park.