New York Employers, Beware of What You Ask Your Applicants and Employees: New York City’s Salary History Inquiry Ban

Because many of our clients are located in New York or have employees in New York, this blog post is the first of several posts on updates to New York, and New York City employment laws and regulations. More will follow in the coming weeks.

On May 4, 2017, Mayor de Blasio signed into law an amendment to the New York City Human Rights Law, which makes it an “unlawful discriminatory practice” for an employer to inquire about or investigate an applicant’s salary history. New York City joins Massachusetts and Philadelphia with similar bans.

Specifically, the law prohibits employers from:

  •  Asking an applicant about his/her salary history, benefits or other compensation;
  • conducting any search through publicly available databases for information about an applicant’s salary history and
  • considering an applicant’s salary history in determining the compensation package to offer the applicant, unless the applicant “voluntarily” and “without prompting” discloses his/her salary history.

So how can employers lure talent and remain competitive? The law allows employers to ask the applicant about his/her salary expectations, including whether any unvested equity or deferred compensation would be forfeited if the applicant left his/her current employment.

The law goes into effect October 31, 2017. The New York Commission on Human Rights is the agency charged with enforcement and the penalties for violating the law are steep. The Commission may impose a civil penalty up to $125,000 for an unintentional violation, and up to $250,000 for a “willful, wanton or malicious act.”  An individual may also file a lawsuit and recover backpay, compensatory damages and attorney’s fees.

To avoid getting caught in the Commission’s crosshairs, employers should update their applications to eliminate the question about salary history and inform everyone involved in the hiring process (including external recruiters) about the laws mandates. In fact, this law is a good opportunity for employers to do a refresher course for all staff involved in recruitment and hiring on what you can and cannot ask a prospective employee.