Seyfarth Synopsis: The New York State Department of Labor has issued guidance concerning the recently enacted Salary History Ban. The guidance covers, among other topics, whether employers can consider the salaries of current employees for promotion, the reach of the law, and what other questions employers are permitted to ask.
In July 2019, Governor Cuomo signed into law a salary history ban. (See our prior alert here). The law went into effect on January 6, 2020, and the New York State Department of Labor recently issued guidance about the law.
New York State joined many other states and jurisdictions with a salary history ban that applies to applicants for employment.1 The guidance provides further clarification as to the scope of the law and what is permissible with respect to both prospective and current employees.
Scope of the Law
- This law applies to any position that will be based primarily in New York State, even if the interview process takes place virtually, via telephone or in another state. The law applies to all public and private employers in New York State, even if the employer is not based in New York.
- This law does not apply to bona fide independent contractors, freelance workers or other contract workers unless they are to work through an employment agency.
- An “applicant” is an individual who “took an affirmative step to seek employment with the employer,” who is not currently employed with the employer, or the employer’s parent company or subsidiary. Applicants include part-time, seasonal and temporary workers, regardless of their immigration status. The law also applies to current employees, which is further explained below.
- Employers are prohibited from, either orally or in writing, personally or through an agent (directly or indirectly), asking any information concerning an applicant’s salary history information or seeking such information from a separate source.
- “Salary history information” includes both compensation and benefits.
- Employers cannot rely on the information as a factor in determining whether to interview, offer employment, or determine what salary to offer.
- The law still permits an applicant to voluntarily disclose their salary history information as long as it is being done without prompting from the prospective employer.
- An employer may not pose an “optional” salary history question to encourage an applicant to voluntarily disclose their salary history.
- Employers may ask an applicant for their salary expectations.
Unlike some of the other salary history bans, this law also applies to current employees. Since employers already have the salary information for current employees, the law, as written, is unclear as to the extent, if any, employers could consider current compensation for internal applicants. The guidance provides further clarification:
- Employers cannot request prior salary history information for prior employers from current employees as a condition of being interviewed or considered for a promotion.
- Employers may consider information already in their possession, such as current salary or benefits, for existing employees.
- As an example, the Department of Labor stated that an employer may use an employee’s current salary to calculate a raise but may not ask that employee about pay from other jobs.
The Hiring Process
Job applications must eliminate questions seeking an applicant’s current or past salary, as well as any optional salary history question. The guidance suggests that employers may wish to proactively state in job postings that it does not seek salary history information from job applicants, but the statement is not a requirement of the law. However, employers are not required to post or set a pay scale for an open position. The law specifically prohibits an employer from retaliating against an applicant or employee for refusing to provide their salary history or complaining about an alleged violation of the law.
Interaction with Other Laws
Employers may require salary history information only if it is required pursuant to federal law, state or local law in effect as of January 6, 2020. Plus, there may be additional protections under local laws, such as New York City, Albany County, Westchester County, and Suffolk County.
While an employer may seek to confirm wages or salary history only when an applicant voluntarily discloses, the employer is prohibited from relying on such information to justify a pay difference between employees of different or various protected classes who are performing substantially similar work as this violates the pay equity law.
Employers should immediately ensure that they are meeting these requirements, and train recruiters and hiring managers to refrain from asking about salary history. As always, Seyfarth Shaw LLP and its attorneys are available to assist employers with ensuring compliance.
1 Fourteen states (Alabama*, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, New Jersey, Oregon, Vermont, Washington, and now New York), nine cities or counties (San Francisco, CA, Kansas City, MO, New York City, NY, Albany County, NY, Suffolk County, NY, Westchester County, NY, Cincinnati, OH, Toledo, OH, and Philadelphia, PA) and one Territory (Puerto Rico) have passed salary history bans. *Note: The Alabama and Philadelphia do not outright ban soliciting salary history but do restrict its use.
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