New York Poised to Enact Tougher Laws on Pay Equity and Salary History Inquiries

Continuing the trend of substantial and expansive legislative changes in employment law, the New York State Senate and Assembly have passed Senate Bill 5248A and Senate Bill 6549. The first bill, S5248A, will prohibit wage differentials based on any protected class and will take effect 90 days after being signed by Governor Andrew Cuomo. The second, S6549, will prohibit private sector employers from asking for wage or salary history as a requirement for a job interview, job application, job offer, or promotion and will take effect 180 days after being signed by Governor Cuomo. The governor is expected to sign the bills into law.

Pay Equity

Expanding New York’s equal pay law, which currently applies only to sex, the proposed legislation also prohibits any differentials in pay because of an individual’s age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, disability, predisposing genetic characteristics, familial status, marital status, and/or domestic violence victim status. Moreover, although the current equal pay law prohibits differentials among individuals who perform “equal work,” the amendment also prohibits differentials among individuals who perform “substantially similar work.”

Specifically, if enacted, the legislation will prohibit all employers from paying an employee in one or more protected class or classes at a wage rate that is less than the rate at which an employee without that status is paid for the following:

• equal work on a job, which requires equal skill, effort, and responsibility and which is performed under similar working conditions, or
• substantially similar work, when viewed as a composite of skill, effort, responsibility and performed under similar working conditions.

As is the case under existing law, a pay differential would be permitted when such differential is based on

• a seniority or merit system,
• a system measuring earnings by quantity or quality, or
• a bona fide factor other than status within one or more protected class or classes that is job related and consistent with business necessity, such as education, training, or experience.

Employers would not be able to use a factor that is based on status within one or more of the protected classes to justify a differential and any factor that an employer uses to justify a differential must be job related with respect to the position in question and consistent with business necessity. Furthermore, consistent with the existing law, an employee would be able to overcome a stated explanation by demonstrating that

• an employment practice causes a disparate impact on the basis of status within one or more protected class or classes,
• an alternative practice exists that would serve the same purpose and not produce such differential, and
• the employer refused to adopt the alternative practice.

Salary History

If enacted, Senate Bill 6549 will amend the New York State Labor Law to institute a state-wide salary history ban. The legislation will prohibit employers, regardless of size or industry, from:

• relying on the wage or salary history of a job applicant in determining whether to offer employment or in determining the wages or salary of such applicant;
• orally or in writing seeking, requesting, or requiring the wage or salary history from an applicant or current employee as a condition to be interviewed, employed, or promoted or as a condition of continuing to be considered for an offer of employment;
• orally or in writing seeking, requesting, or requiring the wage or salary history of an applicant or current employee from a current or former employer, employee, or agent of the applicant, except when confirming wage or salary history when the applicant or current employee provided wage or salary information; and
• refusing to interview, hire, promote, otherwise employ or otherwise retaliating against an applicant or current employee based on his or her prior wage or salary history.

The legislation carves out the following disclosures and exceptions:

• Applicants or current employees may voluntarily, and without prompting, disclose or verify their wage or salary history, including but not limited to for the purposes of negotiating wages or salary.
• An employer may confirm wage or salary history only if, at the time an offer of employment with compensation is made, the applicant or current employee responds to the offer by providing prior wage or salary information to support a wage or salary higher than offered by the employer.
• The bill would not supersede any federal, state, or local law that was enacted prior to the effective date of this law and that requires the disclosure or verification of salary history information to determine an employee’s compensation.
• The bill would not diminish the rights, privileges, or remedies of any applicant or current or former employee under any other law or regulation or under any collective bargaining agreement or employment contract.

Employers that improperly inquire about or rely upon a job applicant’s or current or former employee’s salary history may be liable for compensatory damages (including back pay, front pay, and emotional distress), injunctive relief, and reasonable attorneys’ fees in litigation brought by an aggrieved individual. Individuals will be permitted to seek enforcement of this law and bring a civil action on behalf of all similarly situated persons.

Two Growing Trends

Even prior to passage of this legislation, New York was among a group of states with pay equity laws that provide greater protections than federal law. California, Maryland, Massachusetts, New Jersey, and Oregon also have protections that exceed those available under federal law. If the amendments to the equal pay law are enacted, the New York law will cover an even greater number of protected classes than the Oregon law, which as the most comprehensive of all state pay equity laws, covers sex, race, color, religion, sexual orientation, national origin, marital status, veteran status, disability, and age.

Salary history bans already have been enacted in several localities in New York, including New York City, Albany County, Suffolk County, and Westchester County. However, New York soon may join an expanding list of jurisdictions that have enacted statewide or territory-wide prohibitions on salary history inquiries. Currently, that list includes California, Colorado, Connecticut, Delaware, Hawaii, Maine, Massachusetts, Oregon, Puerto Rico, Vermont, and Washington.

Ogletree Deakins will continue to monitor developments on these bills and post updates to the firm’s blog as additional legislative developments occur.