New York City Employers Can No Longer Inquire as to an Applicant’s Salary History

New York City’s salary history law, codified under the New York City Human Rights Law, becomes effective October 31, 2017, and applies to all employers in New York City, regardless of size. The law prevents New York City employers from asking applicants about their current or prior salary history or benefits to determine an applicant’s “salary, benefits, and other compensation.” These terms are defined broadly and include many factors, including, but not limited to, a car allowance, retirement plan, or bonuses.

Specifically, employers can no longer request information about applicants’ compensation histories on a job application or during the interview process, even if the employer allows the response to be voluntary. An employer that uses a standard application that requests salary history information will not avoid liability by adding a disclaimer that individuals in New York City or applying for jobs located in New York City need not provide the requested salary history information. Employers also cannot ask third parties from the applicant’s current or former place of employment or search public records for information about the applicant’s salary history. If an employer accidentally uncovers information about an applicant’s salary history, the employer may not use that information in determining what salary and benefits to offer the applicant.

Employers may, however, inquire about objective indicators of productivity or performance in an applicant’s current or prior jobs, such as the size of an applicant’s book of business or profits generated. Employers may also ask an applicant about compensation expectations or about competing offers that the applicant has received and the value of those offers.

In anticipation of the October 31, 2017 effective date, New York City employers should review their job applications to ensure that they do not seek or require an applicant to disclose their prior salaries, benefits, or compensation. Employers may also want to review their policies and procedures to ensure that inquiries about applicants’ salary histories are prohibited during job interviews and reference or background checks. If an applicant voluntarily discloses his or her salary history, employers may want to obtain written confirmation from the applicant that the disclosure was voluntary and unprompted.

Employers who are found to have violated the law may be required to pay damages, a fine, and/or be subject to additional affirmative relief such as mandated training and posting requirements.

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