Loren L. Forrest, Jr. is a partner and Katherine Healy Marques is an associate in Holland & Knight's New York office
Under a recent amendment to the New York City Human Rights Law (NYCHRL) that went into effect on Oct. 31, 2017, New York City employers are prohibited from making inquiries about the salary history of job applicants during the hiring process.
The new legislation, signed into law by Mayor Bill de Blasio on May 4, 2017, amends the NYCHRL making it an unlawful discriminatory practice for an employer or staffing agency to inquire about the salary history of a job applicant or rely on the salary history of a job applicant in determining salary, benefits or other compensation for the applicant during the hiring process, including in the negotiation of a contract.
Employers remain permitted to engage in discussion with a prospective employee about the candidate's expectations for salary, benefits and other compensation. This includes discussion about unvested equity or deferred compensation that a job candidate may forfeit upon resignation from their current employer.
The law expressly allows employers to make inquiries about "objective measure" of an applicant's "productivity," such as revenue, sales or other production reports, even if they have an effect on the applicant's compensation.
If a candidate voluntarily and without prompting discloses salary history during the hiring process, the law permits an employer or staffing agency to consider the candidate's salary history and to verify salary information.
The new law does not apply to employees who are applying for an internal transfer or promotion with their current employer, and whose salary history is naturally already known to the employer.
This new legislation is part of the current trend in New York City, as well as other cities and states, toward policies designed to foster conditions of equal pay among candidates regardless of differences in gender, race or ethnic background. Under the "equal pay" provisions of New York State Labor Law 194, employers across the state are already prohibited from restricting employees from discussing wages. New York state employers are also prohibited from paying any employee less than another employee of the opposite sex for equal work, except when the difference is due to a bona fide merit or seniority-based system.
Employers in New York are advised to seek advice concerning compliance with the new NYCHRL to revise employment application forms, job candidate pipeline protocols and compensation policies.
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