New York City: October 31, 2017
Effective October 31, New York City law prohibits employers from inquiring about a job applicant’s salary history, or relying on the salary history of an applicant in determining the salary, benefits or other compensation for such applicant during the hiring process. The law is part of a growing trend in cities and states around the country that are pursuing laws designed to avert gender pay inequities in hiring.
Local Law 67’s salary history ban is broad: It pertains to all employers, public and private. “Salary history” pertains to wages, benefits, and any other form of compensation. And “inquiring” about an applicant’s salary history includes all manner of inquiries, from an interview question to searching internet records.
However, employers may discuss with the applicant the proposed or anticipated salary or salary range, and, without inquiring about salary history, discuss the applicant’s compensation expectations. The law does not encompass, in its definition of salary history, a discussion of any objective measure of the applicant’s productivity, such as revenue, sales, or other production. Furthermore, if the applicant “voluntarily and without prompting” discloses salary history to an employer, the employer may consider salary history in determining compensation for the applicant and may verify the applicant’s salary history.
The law does not apply to current employees seeking an internal transfer or promotion.
The New York City Commission on Human Rights is charged with implementing the law. Noncompliance, if determined by the Commission to be unlawful discriminatory practice, could incur a civil penalty of up to $125,000 for an unintentional violation and up to $250,000 for a willful violation. Some in the legal community predict that New York’s law—and the growing number of similar laws, in general—will create the potential for big class-action suits, down the road.
Some have noted that the law will have a ripple effect in HR procedures outside of its jurisdiction, because with so many international and national businesses operating in New York, companies will apply the stricter law uniformly across their businesses in other locations.
New York City’s action represents a concerted push at the city and state level, as efforts to enact equal pay legislation at the federal level do not appear likely.
Early Birds: Pittsburgh, New Orleans, and Philadelphia
New Orleans: The Crescent City led the nation in passing a pay history ban—the law took effect immediately upon mayoral signature on January 25, 2017—but it only applies to employment with city government.
Pittsburgh: Five days after New Orleans, Pittsburgh banned the salary history question and made it illegal to rely on wage history in the employment process for applicants to government jobs, only.
Philadelphia: While Philadelphia’s salary history ban was to take effect in May 2017 and applies to all public and private employers doing business in the city, its enactment has been suspended by the court while the city’s Chamber of Commerce legal challenges it on the grounds that the law violates the First Amendment. As written, the law carries a penalty of $2,000 per violation, plus 90 days in jail for repeat offenses.
Next Up: Delaware, California, Massachusetts, Oregon
Delaware: December 2017
The Delaware salary history law applies to all employers across the state. The Delaware law differs in that it only prohibits an employer from screening applicants “based on their compensation histories, including by requiring that an applicant’s prior compensation satisfy minimum or maximum criteria” or from seeking the compensation history of an applicant from the applicant or a current or former employer.
The law allows employers to proactively assess pay based on other factors, such as merit, experience, and the market. Salary negotiations with applicants are allowed, provided the employer neither requests nor requires salary history. Voluntary discussions of past salary history are not expressly prohibited. After an offer of employment is made, an employer may request compensation history for the sole purpose of confirming salary history—not to be used as a factor in the employment decision.
The Delaware law gives the Delaware Department of Labor the right to enforce and impose civil penalties of $1,000 to $5,000 for first-time offenses and $5,000 to $10,000 for each subsequent violation. However, it puts forth that “interviewing and hiring for a single position shall constitute a single violation,” so a breach could be ruled as a singular offense, and not be multiplied by the number of applicants for a position.
California: January 2018
In October, California Assembly Bill 168 was signed into law by the Governor, placing California among the states prohibiting all private- and public/government-sector employers from inquiring about or seeking applicant salary history information, or relying on salary history to impact the employment decision or the compensation amount offered. Employers are required to provide a position pay scale to the applicant. Like New York City, the restrictions do not apply to salary history information offered voluntarily by applicant, without employer prompting.
San Francisco: July 2018
San Francisco’s salary history ban applies to all employers, including city contractors and subcontractors, and all job applicants, including those applying for temporary, seasonal, contingent, and part-time work.
Puerto Rico: March 2018
The Commonwealth’s Equal Pay Law will prohibit private- and public-sector employers from asking the salary question and from using salary information in the employment process. It also contains an anti-retaliation provision, protecting employees who disclose their own salary or discuss salaries with other employees.
Massachusetts: July 2018
In 2016, Massachusetts became the first state to pass salary history legislation but did not codify it for two years.
Oregon: January 2019
Like the other states, Oregon’s law is part of a large Equal Pay Law, passed on October 6, 2017. Most of its provisions go into effect January 1, 2019.
Idaho, Maryland, New York, Rhode Island, Texas, and Virginia all have equal pay bills in the works.