The official blog of Abacus Group — a place to share our knowledge and thoughts on trends in recruiting

October 13, 2017

The New NYC Law Prohibiting Salary Inquiries

Beginning October 31, 2017, a New York City law will deem it illegal for employers, employment agencies and employees/agents to “inquire” into, or rely upon, an applicant’s salary history. The new law will regard such a practice as unlawful and discriminatory under the New York City Human Rights law.

The new legislation defines “inquire” as encompassing direct questions or statements to the applicant, as well as statements to the applicant’s current or former employer. It also prohibits the aforementioned parties from conducting searches of publicly available records of salary history. These parties, however, may still inquire into an applicant’s desired salary or salary range. “Reliance upon” salary history pertains to the use of such information to determine future compensation. To do so as a means of determining salary, benefits or other compensation will thusly be unlawful and discriminatory.

These measures aim to close the gender wage gap; motivated by the mentality that gender pay disparities can follow individuals throughout their careers, suggesting that once a disparity in compensation is introduced, it disadvantages an applicant going forward with subsequent salary negotiations for future roles.

The prohibition on salary history inquiry and reliance on salary history does not apply to incidences where the applicant voluntarily and without prompting, discloses this information. There are however certain limited exceptions to these new prohibitions, including applicants seeking internal transfers or promotions.

Violators of the new legislation may have private civil actions brought against them, or be met by an investigation from the New York City Commission on Human Rights. Civil penalties may go as high as $125,000 for an unintentional violation and up to $250,000 for a “willful, wanton, or malicious act.”

New York City joins other U.S. cities and states that have already enacted similar bans: Oregon, effective October 2017, Delaware effective December 2017, Massachusetts effective July 1st, 2018. Philadelphia’s pay ban was set to take effect on May 23rd, 2017, however, in April, the city agreed to delay enactment pending a ruling on a motion for a preliminary injunction after it was brought forward that small businesses would suffer under the ban.

With just over two weeks to go before the law comes into effect, relevant parties should begin to review application materials and job postings to eliminate incriminating lexicon and ensure compliance with the new legislation. There should be a strong focus on education so that all involved know their rights and obligations.

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