New York Employers Facing Stringent Salary History Ban in 2020

Employers in New York state will be prohibited from asking job applicants or employees for their salary history — or relying on prior salary history — as part of a salary ban that becomes effective at the start of the new year. The Empire State ban is one of 17 statewide prohibitions on employers asking about previous wages.

The “Salary History Bill” is considered a stringent measure because it forbids employers from seeking as well as relying on past wage information as requirements for job interviews, job applications, job offers, or promotions. It applies to current and former employees as well as job applicants and affects both public and private employers.

This law goes into effect on Jan. 6, 2020.

Eliminating pay inequalities

Like many prohibitions on asking for previous wage information, the legislation is aimed at eliminating widely reported pay inequalities between men, women, and minorities. Women in New York, on average, earn 89 cents per dollar earned by men, according to a state Department of Labor report released in April 2018 — the narrowest pay gap in any state.

For women of color, the pay gap is even wider. Black women on average earn 64 cents per dollar and Latina women earn 55 cents per dollar compared to white men, according to the report.

The salary history ban  is part of New York Gov. Andrew Cuomo’s campaign to help close the gender pay gap. Gov. Cuomo signed the measure  on July 10, 2019 as one of two key laws in his agenda for women’s justice.

In addition, the other law is the “Pay Equity Bill,” a measure that made significant changes to New York’s existing gender-based pay discrimination law by forbidding differences in pay, not just based on sex, but also adding in a number of factors such as race, religion, and gender identity.

Some New York employers have already been operating under a salary history ban. New York City employers have not been permitted to ask job applicants about salary history since 2017. Gov. Cuomo also signed an Executive Order in January 2017 requiring all agencies and departments over which he had authority to adopt salary history blind hiring practices.

In some of the local jurisdictions — Albany County, Suffolk County, and Westchester County — employers were also operating under salary history bans.

Those who support salary history bans say that when employers depend on previous salary history to determine how much to offer new hires, wage inequity is continued with each succeeding job.

Paid less with the first job

Proponents of the bans argue that employer use of prior salary history perpetuates wage inequities for women and minorities. For example, a study by the American Association of University Women found that — even taking into account factors that affect earnings — women’s lowered earnings compared to men begins as early as one year after college, where women typically earn 6.6% less than men.

Those who support salary history bans say that when employers depend on previous salary history to determine how much to offer new hires, wage inequity is continued with each succeeding job.

New York lawmakers noted in the introduction to the proposed legislation that it’s aimed at preventing “further wage discrimination” by forbidding employers from asking for wage or salary history as a requirement for a job interview, job application, job offer, or promotion.

“This tactic is used by employers to justify their lower pay rate and/or marginal pay increase for employees. This practice is a root cause of continued wage inequality,” the politicians noted in the bill, adding that the law helps to enforce equal pay laws passed by the federal government almost 50 years ago.

What’s in the new law?

Employers are not allowed to:

• Rely on the wage or salary history of a job applicant in determining whether to offer a job to the applicant, or in determining the wages or salary for the applicant
• Seek, request, or require the wages or salary history of a job applicant or current employee as a condition for an interview, continued consideration for a job offer, or as a condition of employment or promotion
• Seek, require, or request the wage or salary history of a job applicant or current employee from a current or former employer, their agent, or another employee
• Retaliate against an applicant or current employee who did not provide wage or salary history by refusing to interview, hire, or promote the individual; nor can employers retaliate against those who file a complaint alleging a violation of the new legal requirements

However, employers are allowed to:

• Confirm wage or salary history if, at the time a job offer is made that includes compensation, the applicant provides salary history information to support a request for higher wages

Voluntary disclosure

Like many salary history bans, the law allows for voluntary disclosure by job applicants and employees so long as it is done without prompting from the employer.

Private right of action

The new law explicitly provides job applicants and current and former employees the right to bring a civil action in court for compensation for damages. Courts can award reasonable attorney’s fees and injunctive relief.

States move on salary history bans

Salary history bans are becoming increasingly common. At the present time, there are 17 statewide bans and 19 bans in place in local jurisdictions, according to HR Dive. Details of the bans vary; some of them only apply to government employers and some of the local bans become null and void if a statewide ban is approved.

Most of bans only apply to job applicants and a number of recent bans forbid employers from relying on previous salary history unless the information has been volunteered.

In 2019 alone, a number of salary history bans have been put into place:

• On March 13, the Cincinnati City Council voted to prohibit employers from asking job applicants for their salary history as of March 2020.
• In April, North Carolina Gov. Roy Cooper signed an executive order forbidding state government agencies from using a job applicant’s salary history in determining how much to offer successful applicants and mandating that public employers remove salary history inquiries from employment forms. Maine’s legislature also passed a salary history ban in April.
• On May 9, Washington state’s governor signed a bill forbidding employer inquiries about previous salary history that became effective July 28, 2019.
• On May 22 Colorado Governor Jared Polis signed a salary history ban as part of the state’s equal pay legislation that applies to both private and public employers regardless of size. It goes into effect on Jan. 1, 2021, unless a referendum petition is filed.
• In June, Kansas City, Missouri passed a salary history ban. On June 11, Alabama  Gov. Kay Ivey signed a salary history ban as part of the state’s equal pay legislation, Clarke-Figures Equal Pay Act.

More salary history bans could be on the way. Salary blind hiring practices are under consideration in several state legislatures and local jurisdictions.

But there’s been a backlash. In employer-friendly moves, Michigan and Wisconsin lawmakers passed laws that “banned the bans.”

• In June 2018, Michigan passed a law forbidding local governments from regulating the information that employers can require, request, or exclude on job applications or during the hiring process that went into effect in January 2019.
• In April 2018, Wisconsin passed a similar law, stating local governments could not pass legislation that prohibits employers from asking about salary history.

National action stalled

Nationwide, there is no salary history ban in effect. Capitol Hill lawmakers are considering a bill that would create such a prohibition. “The Paycheck Fairness Act” would, among other things, ban employers from seeking a job candidate’s salary history. The bill was approved on March 27 by the Democratic-controlled U.S. House of Representatives.

A companion bill was introduced in the Republican-controlled U.S. Senate in January 2019 but there’s been little movement on it since its introduction.