New York City Council Passes Legislation Banning Salary History Inquiries

Author: Marta Moakley, XpertHR Legal Editor

April 11, 2017

The New York City Council has approved a bill that would prohibit employers from inquiring about a prospective employee's salary history during all stages of the employment process, including the negotiation of an employment contract. The bill also cautions that, in the event that an employer is already aware of an employee's salary history, then the employer may not rely on that information or knowledge when determining the prospective employee's salary. Mayor Bill DeBlasio is expected to sign the legislation.

The bill's stated purpose is to "reduce the likelihood that women will be prejudiced by prior salary levels and help break the cycle of gender pay equity."

The bill covers written or oral inquiries regarding wages, benefits and other compensation made of:

• An applicant;
• An applicant's current or former employer; or
• An agent of an applicant's current or former employer.

An employer should also refrain from conducting a search of public records or other available reports in order to obtain an applicant's salary history.

The employer may, however, inform the applicant in writing about the position's proposed or anticipated salary or salary range. In addition, salary history, as defined, does not include any objective measure of the applicant's productivity, including:

• Revenue;
• Sales; or
• Other production reports.

An employer may also discuss with the applicant his or her expectations with respect to a position's salary, benefits and other compensation, including a discussion of any unvested equity or compensation that an applicant would forfeit by resigning a current position in order to accept a job offer. If an applicant voluntarily and without prompting discloses salary history to an employer, then the employer may consider salary history in determining salary, benefits and other compensation, and may verify that applicant's salary history.

The law does not cover applicants for internal promotion or transfer. In addition, the law does not apply to a situation where any federal, state or local law authorizes the disclosure or verification of salary history for employment purposes, or specifically requires knowledge of salary history to determine an employee's compensation.

New York City agencies are already prohibited from making inquiries regarding a job applicant's salary history prior to making a conditional offer of employment under an executive order signed by Mayor DeBlasio. In addition, New York employers are subject to the Women's Equality Act, which also addresses pay equity and protects employees from retaliation when discussing current wages or salaries.