What New York employers need to know about the state's new equal pay and salary history laws
The U.S. women’s soccer team celebrated their victory over the Netherlands at a victory parade in Lower Manhattan last week. Amid the champagne and confetti showers, Gov. Andrew Cuomo (D) signed into law two bills aimed at combating pay gaps in the workplace: an equal pay bill, and a salary history bill. The signing was symbolic. The U.S. women’s team has sued the United States Soccer Federation, alleging that the men’s team is paid more than the women’s team despite the latter’s much greater success on the field (four World Cup wins for the women’s squad, and none for the men). Chants of “equal pay” rained down on the women’s team at the final game against the Netherlands and at Wednesday’s victory parade.
Here is a summary of the equal pay and salary history bills that Governor Cuomo signed into law:
The first bill dramatically expands New York’s equal pay law to cover not only sex-based pay disparities but also pay disparities based on any characteristic protected by the state’s human rights law. This means that all employees—regardless of their age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, or domestic violence victim status—must be paid the same.
The bill also lowers the burden of proof for comparator evidence. Under existing law, an employee has to show that she is being paid less than the comparator employee for “equal work.” Under the new law, the employee will have to show only that he or she and the comparator performed “substantially similar work.”
Although the new law is expansive, employers can still use traditional defenses to defeat a pay-equity claim: seniority system, merit system measuring earnings by quality and quantity, and a bona fide factor that is job-related and consistent with business necessity – such as education, experience, geography, or training.
The new equal pay law will take effect October 8, 2019.
The second bill prohibits all employers from asking applicants, or current employees seeking promotion, about their salary histories. More specifically,
- An employer cannot rely on the salary history of an applicant in deciding whether to extend an employment offer.
- An employer cannot rely on the salary history of an applicant or current employee in determining salary.
- An employer cannot seek, request, or require an applicant or current employee’s salary history for interview, employment, or promotion purposes.
- An employer cannot seek, request, or require salary history information from a current or former employer except to confirm salary history when voluntarily provided by the applicant or current employee.
- An employer cannot retaliate against an applicant or current employee for refusing to provide salary history information.
- An employer cannot take adverse action against an applicant or current employee (for example, by refusing to interview, hire, or consider for promotion) based on salary history.
There is a key exception: it is lawful for an applicant or current employee to voluntarily, and without any coercion or prompting, disclose or verify his or her salary history for purposes of negotiating salary.
The new salary history law will take effect January 6, 2020.
Recommendations
New York now has the most comprehensive pay equity law in the nation. Companies with New York operations should review their pay practices and consider a pay equity audit that takes into account not just gender-based pay disparities but disparities based on other protected characteristics. These companies should also review their interview and hiring policies and practices to ensure that they comply with the salary history law. Twelve other states, including California, have laws restricting salary history questions.
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