New York City Mayor Bill de Blasio signed legislation prohibiting employers from inquiring about a prospective employee’s salary history during the hiring process. New York City joins Massachusetts and Philadelphia in passing legislation seeking to address the gender pay gap and ensure pay equity in the workplace.

Key details of the new law:

  • It will take effect October 31, 2017 and applies to private employers, among others.
  • It amends the Administrative Code (section 8-107) of the City of New York in relation to prohibiting employers from inquiring about or relying on a prospective employee’s salary history.  Therefore, as an employer, if inquiring into salary history is a part of your background screening process, you will need to re-evaluate this practice in order to ensure compliance by October 31, 2017.
  • Once effective, it will be an unlawful discriminatory practice for an employer, employment agency, or employee or agent to (i) inquire about the salary history of a job applicant; or (ii) rely on the salary history of a job applicant in determining salary, benefits or other compensation during the hiring practice, and including the negotiation of a contract.
  • Exceptions — an employer can still engage in a discussion with the job applicant about their expectations with respect to salary, benefits and other compensation; but, they cannot ask about salary history.   Another exception to the general restriction on inquiring about salary history is where the job applicant proactively discloses salary history, at which point an employer may consider salary history and may even verify the job applicant’s salary history.
  • The general prohibition on inquiring about salary history does not apply to situations where federal, state or local law requires such disclosure or verification of salary history for employment purposes; (ii) internal transfers or promotions; and (iii) public employee positions governed by a collective bargaining agreement.

Background screening companies note the term “agent” and the potential for a claim of engaging in an unlawful discriminatory practice. Bear in mind that New York City’s Stop Credit Discrimination in Employment Act (SCDEA) makes it unlawful to “aid or abet” any form of prohibited discrimination, including credit discrimination and this applies to consumer reporting agencies (i.e., background screeners). It is likely that the New York City Commission on Human Rights will issues regulations and guidance to clarify the intent of the law and we will see if they address this issue and other aspects of the law.