New Guidance Available for New York Employers About the Recent Salary History Ban

The New York State Department of Labor has created a website to provide guidance on the state’s recent Salary History Ban. We previously reported on the state’s Salary History Ban in detail here after it was passed by the New York legislature. New York Governor Andrew Cuomo signed the salary history ban into law on July 10, 2019 and it went into effect on January 6, 2020. The new website summarizes the Salary History Ban by explaining that, “The new law prohibits all employers - both public and private - from asking prospective or current employees about their salary history and compensation.  It also prohibits businesses from seeking similar information from other sources.”

The website links to a “Salary History Ban – What You Need To Know” page, which provides important guidance about the ban in a FAQ-style format. These questions and answers are useful for employers looking to learn more about how to comply with the new salary history ban.

• The New York Salary History Ban applies to both applicants and current employees. An “applicant” is someone who took an affirmative step to seek employment with the employer and who is not currently employed with that employer, its parent company or a subsidiary. This includes part-time, seasonal and temporary workers, regardless of their immigration status.
• The Salary History Ban does not apply to bonafide independent contractors, freelance workers or other contract workers unless they work through an employment agency.

Here are some key takeaways from the state’s guidance:

Coverage

• The New York Salary History Ban applies to both applicants and current employees.  An “applicant” is someone who took an affirmative step to seek employment with the employer and who is not currently employed with that employer, its parent company or a subsidiary. This includes part-time, seasonal and temporary workers, regardless of their immigration status.
• The Salary History Ban does not apply to bonafide independent contractors, freelance workers or other contract workers unless they work through an employment agency.

Applicants

• If an applicant voluntarily and without prompting discloses salary history information, the prospective employer may use that voluntarily disclosed information in determining the salary for that person. However, employers may not, for example, pose an “optional” salary history question on a job application seeking a voluntary response.
• Employers may ask an applicant for their salary expectations for the position instead of asking what the applicant earned in the past.
• Employers may seek to confirm wage or salary history only if an applicant voluntarily discloses such information.
• Employers cannot rely on an applicant’s salary history information as a factor in determining whether to interview or offer employment at all.
• Even when prior salary is permitted to be utilized, the new guidance cautions employers that prior salary cannot justify a pay difference between employees of different or various protected classes who are performing substantially similar work as this violates Section 194 of New York’s Labor Law.

Current Employees

• Employers cannot request prior salary history information from current employees as a condition of being interviewed or considered for a promotion.
• To the extent that employers are already in possession of salary information for their current employees (i.e. a current employee’s current salary), the employer can consider that information in determining the salary for that employee in a new role within the company.  While not explicitly addressed in the guidance, however, to the extent that the salary information of a current employee is not known by the team or business unit to which the employee is seeking a position, hiring managers should abstain from inquiring about a current employee’s present compensation, given the risk that such information could be used unlawfully as part of a promotion or hiring decision.
• As explained above, even where employers can consider the known compensation information of its current employees seeking a new role within the organization, employers should analyze all compensation decisions to ensure that prior salary history information is not driving a pay differential between employees of different or various protected classes who are performing substantially similar work.

New York employers should ensure that their recruiting, hiring, and promotion procedures, including those that apply to internal candidates, comport with the prohibitions and requirements outlined in the Salary History Ban and the state’s guidance.