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New York State Legislature Passes Salary History Ban, Broadens Equal Pay Law

July 01, 2019

The New York State Senate and Assembly have passed two bills amending the New York Labor Law (NYLL) with significant implications for employers in the state: Bill 6549, which implements a statewide prohibition on salary history inquiries, and Bill 5248, which amends New York’s equal pay law to cover all protected classes. Governor Andrew Cuomo has already stated that he will sign both bills into law. These bills are very similar to amendments that were initially proposed in the 2019 state budget, summarized in our previous LawFlash, but were removed from the final version of the budget.

Statewide Salary History Inquiry Prohibition

Bill 6549 amends the NYLL to prohibit the use of salary history in employment decisions, mirroring an existing ban in force in New York City. The bill makes it a violation of the NYLL for an employer to rely on or inquire about the salary history of a job applicant as a factor in determining (a) whether to hire the applicant, or (b) what salary to offer the applicant.

The bill further prohibits employers from (a) seeking, requesting, or requiring the disclosure of salary history of job applicants or current employees as a condition of consideration for employment, an offer of employment, or an offer of promotion; (b) seeking, requesting, or requiring the disclosure of salary history of job applicants or current employees from a current or former employer or any of their agents; or (c) refusing to consider for employment, hire, or promote an applicant or current employee who does not provide their salary history.

The bill does not prohibit an applicant or current employee from voluntarily, and without prompting, disclosing or verifying wage or salary history, including if the employee seeks to use that information for purposes of negotiating his or her compensation. Relatedly, the bill provides that an employer is only allowed to confirm a job applicant’s compensation history if at the time it offers employment to a candidate, the candidate responds by providing salary history to support their request for a wage or salary higher than the current offer.

Notably, the bill creates a new private civil right of action for violations, and allows prevailing plaintiffs to recover injunctive relief and reasonable attorney fees.

The bill includes a carve out stating that it will not supersede any currently existing federal, state, or local law that requires disclosure or verification of salary history information to determine an employee’s compensation.

These changes will take effect 180 days after the governor signs them into law.

Broadened State Equal Pay Law

Bill 5248 modifies the equal pay provisions of the NYLL to protect members of all protected classes under the New York State Human Rights Law (NYSHRL) from receiving less pay than colleagues who are not in the same protected class for doing the same or substantially similar work. These protected classes include age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, marital status, disability, domestic violence victim status, criminal or arrest record, or predisposing genetic characteristics. Currently, this provision only applies to unequal pay based on sex. While individuals in other protected categories who believed they were unfairly underpaid may have been able to seek redress under the NYSHRL previously by arguing that the underpayment constituted unlawful discrimination, this amendment is significant as it would allow these individuals to now bring a claim for equal pay directly under the NYLL in addition to any applicable discrimination statutes. This development is notable as the NYLL allows individuals to bring claims for six years, which is double the three-year statute of limitations applicable to discrimination claims under the NYSHRL.

The bill also specifically modifies the equal pay provisions of the NYLL, which previously only required equal pay for “equal work” to also apply to individuals performing “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” Notably, the bill does not modify the currently existing exceptions to the equal pay provisions of the NYLL, which allow employers to pay unequal compensation where the difference is based on a seniority system, merit system, production-based system, or “a bona fide factor other than status within one or more protected class or classes, such as education, training, or experience.” Any such “bona fide factor” must be job-related and consistent with business necessity.

These changes will take effect 90 days after the governor signs them into law.

Conclusion

Employers should consult with counsel to the extent they currently consider or request salary history in making employment decisions in New York State outside of New York City; review their discrimination and compensation policies; and consider conducting a pay audit, on an attorney-client privileged basis, in light of the expanded scope of the NYLL’s equal pay protections to cover all protected categories and not just sex.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

New York
Leni D. Battaglia
Melissa C. Rodriguez
Douglas T. Schwarz
Kenneth J. Turnbull
Kimberley E. Lunetta
Daniel A. Kadish