A law went into effect on October 31, 2017 that significantly changes the way in which salary determinations – and negotiations – will occur throughout New York City. This law bars employers of all sizes, public and private alike, from asking applicants about their salary history during the hiring process. Only public agencies whose hiring practices and salary parameters are set by a collective bargaining agreement are exempt.
According to the New York City Commission on Human Rights, the purpose of the law is to ensure that every worker is paid according to his or her qualifications and experience as applicable to the position, not locking them into a cycle of payment based simply on previous salary. NYCCHR research has shown that using salary history as a starting point for negotiations has the potential to create “a cycle of inequity and discrimination in the workplace, which perpetuates lower salaries specifically for women and people of color.”
What restrictions exist for employers?
Basically, employers cannot solicit or use any salary history information that is not freely and voluntarily provided by an applicant. Furthermore, any records or information that a prospective employee chooses to provide must not be based on any “prompting” on behalf of the employer, whether on an application or via a conversation.
In addition, employers cannot:
- Ask any questions or request any records from an applicant him or herself about past or current salary or benefits
- Search publicly available data/records to discover salary information
- Request salary history records from current or former employers of the applicant
- Rely on any inadvertently or purposely disclosed salary data from an applicant when setting compensation and benefits
Employers who persist in requesting historical salary data in spite of the new law could find themselves in proverbial hot water. Consequences include fines levied by the New York City Commission on Human Rights, damages to the affected employee/applicant and mandatory training about the law’s restrictions.