New York State Lawmakers Expand Pay Equity Law

New York state has made significant changes to its gender-based pay discrimination law that forbids differences in pay based on sex.

Lawmakers scrapped the standard for making legal claims in favor of one that is employee-friendly. The new law also expands the law’s reach to make it illegal to pay someone less based on a multitude of factors that now include race, religion, or gender identity.

The new law applies to all private employers in the state.

Democratic Gov. Andrew Cuomo signed the changes into law on July 10. The changes became effective on October 8, 2019.

The purpose of the legislation is to protect more employees from pay discrimination, lawmakers say in the bill’s introduction.

Rejecting “equal pay for equal work” legal standard

Previously, the New York Equal Pay law mandated equal pay for men and women performing equal work under similar working conditions. The new law eliminates the “equal pay for equal work” legal standard and directs that equal pay is required among employees who perform “substantially similar” work – a new requirement for bringing a lawsuit that is expected to make it easier for workers to prove discrimination in court.

“The ‘equal pay for equal work’ standard has proved to place an excessive burden of proof on aggrieved employees when filing a claim for pay discrimination,” lawmakers explained in the bill. “In order to establish an equal pay violation, an employee must demonstrate that their job is substantially equal to the job of their higher-paid colleague.”

Expanding who can sue for pay discrimination

Lawmakers also noted in the bill that, while current equal pay laws protect against gender-based pay discrimination, the new law will address pay discrimination based on other factors including:

• Age
• Race
• Creed
• Color
• National origin
• Sexual orientation
• Gender identity and expression
• Military status
• Disability
• Predisposing genetic characteristics
• Familial status
• Marital status
• Domestic violence victim status

While these employees are already protected against other forms of unlawful discrimination in the workplace under the New York State Human Rights Law, the new law will ensure that their employers cannot also discriminate in terms of their compensation, lawmakers say.

However, there are certain circumstances where employers can make pay differentials. Employers can pay employees differently if that difference is based on:

• A seniority system
• A merit system
• A system which measures earnings by quantity or quality of production
• A bona fide factor such as education, training, or experience

But, an exception will not apply if the employee demonstrates (1) that an employer uses a particular employment practice that causes a disparate impact on one of the now protected groups or (2) that an alternative employment practice exists that would serve the same business purpose and not produce such differential, and (3) that the employer has refused to adopt such alternative practice.

The state Labor Department can recover $500 for each violation of the law in an administrative or civil court proceeding.

New Jersey enacted similar changes in July 2018 with the Diane B. Allen Equal Pay Act. That law expanded pay discrimination protections in the Garden State to cover all protected classes, not just gender. Like the recently enacted amendment to New York’s pay equity law, the New Jersey law makes it illegal to pay an employee who is a member of a protected class less in compensation and benefits than employees outside the protected class for “substantially similar” work, unless the employer can demonstrate that an exception such as a seniority system, merit system, quality or quantity of production or training, education, or experience applies.