New York Employment Law Update: New York State Enacts Measures to Promote Pay Equity and Eliminates Inquiries into Salary History

July 2019

Last week, Governor Cuomo signed legislation that significantly expanded New York’s existing Pay Equity Law (expanding protections to all protected classes, not just gender), and signed a ban on inquiries into applicants and current employees’ salary history. While NYC-area employers have not been permitted to inquire into applicants’ salary history since 2017, the new law expands this ban to current employees, and applies to employers across the State. As such, all New York employers will need to examine their compensation and recruiting practices.

Expansion of the Pay Equity Law

Previously, the New York Equal Pay Law mandated equal pay for men and women performing “equal work.” Under the new law, equal pay is now required among employees who perform “substantially similar” work, when accounting for skill, effort, responsibility, and working conditions. In other words, employers must now evaluate pay equity in terms of an employee’s actual responsibilities, and cannot rely solely upon comparisons of employees with the same title.

In addition, the law now requires equal pay among all protected groups under the New York State Human Rights Law (“NYSHRL”), and not just gender. However, the law does retain the following permissible factors that may justify a pay differential: (1) a seniority system, (2) a merit system, (3) “a system which measures earnings by quantity or quality of production,” or (4) “a bona fide factor” other than the protected status (e.g. education, training, or experience).

This law is effective as of October 8, 2019.

Salary History Ban

Under the new law, employers are forbidden from asking job applicants or current employees wage or salary history as a condition of consideration for employment or promotion, and from asking other employers for that information. Employers are likewise prohibited from refusing to consider, employ or promote an applicant or current employee based on either their salary history or their refusal to provide salary history.

While the new law prohibits employers from using an applicant or employees’ prior pay rate to set their rate of pay, the law expressly permits employers to consider the information when an applicant or employee discloses that information (including for the purpose of negotiating their salary). In addition, if an individual rejects an existing compensation offer, while citing to their prior salary, an employer may verify that salary with the individual’s prior employer.

Employers in New York City should take note: this salary history ban is similar to NYC’s own ban on considering salary history with one crucial distinction: while the NYC ban only applies to applicants, the State’s new salary history ban also applies to current employees.

This law is effective as of January 6, 2020.

Ensuring Compliance with Pay Equity and Salary History Requirements

The foregoing changes will impact how employers will handle compensation amongst all of their employees, as well as job applicants. As these constitute significant changes to the law, it is recommended that all employers with New York-based employees review their training programs, policies, and consult with their employment counsel.

Hairstyle Discrimination Prohibited Under the NYSHRL

Following in the footsteps of NYC, which recently provided guidance explaining that discrimination based on hairstyle qualified as race discrimination, Governor Cuomo recently signed legislation amending the NYSHRL to add a subsection to the NYSHRL’s definition of race to include “traits historically associated with race, including but not limited to hair texture and protective hairstyles.” This change is effective immediately, and employers across the State should review their own workplace grooming and dress policies to ensure that such policies comply with the amended NYSHRL.

For more information on this issue or other employment matters, please contact:

Carol Goodman at [email protected] or +1 212 592 1465

© 2019 Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.