What is the new legislation?
The new legislation, if signed, will ban employers (those with four or more employees) from asking job candidates, as well as their current and past employers, about salary history during the hiring process. This includes inquiries as to wages, benefits, and other forms of compensation. It also bans employers from searching publicly available records for this information and using it to make compensation decisions. Inquiring about past pay during the interview process will be considered an unlawful and discriminatory practice.
However, if an applicant volunteers information about past compensation without prompting, that information may be used to determine the candidate’s salary.
Who will the law apply to and will there be exceptions?
This legislation applies to employers in New York City, regardless of where the employee is based or coming from. It does not apply to:
- Applicants for internal transfer or promotion with their current employer
- Public employees whose salaries are determined by collective bargaining agreements
- Instances in which an applicable law requires disclosure and/or verification of salary history for employment purposes
When will it go into effect?
The New York City Council passed the bill on April 5, 2017. Mayor Bill de Blasio is expected to sign the bill shortly, and the legislation will go into effect 180 days after he signs it, provided it’s not successfully challenged in court. We’ll keep you updated when we know more.
Why was this bill enacted?
This bill is aimed at narrowing gender-based wage gaps. It increases the likelihood that women and minorities who have historically been paid at lower rates won’t have their pay rate follow them around for the rest of their careers. Massachusetts recently passed a similar bill in 2016.
Need more information on staying compliant when hiring?
What steps should I take as a covered employer?
- Review policies and practices - If your current hiring practices include asking candidates about prior salary history, begin the process of changing your company policy. Make sure employees (particularly managerial employees) involved in the interviewing process are trained and aware of the new law.
- Change necessary job applications - If any current job applications for your company currently request previous pay grade, be sure to remove those fields.
- Document voluntary disclosure - On the occasion a candidate does disclose pay history without prompting, have a company policy for documenting the disclosure and keep it in your records.
Looking for more information on interview question guidance? Here are a couple articles that might help you out:
- 10 Recruiting Mistakes to Avoid in the Hiring Process
- Building Company Culture? Start with the Interview & Hiring Process
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.