New York City has expanded the subjects that are off-limits to employers during the hiring process. Mayor Bill DiBlasio recently signed legislation (the “Act”) that will make it unlawful during the hiring process for employers and employment agencies to inquire about or rely upon an applicant’s salary history when determining the applicant’s salary, benefits or other compensation. The Act prohibits asking the applicant, the applicant’s current or prior employer, or searching publicly available records, for the purpose of obtaining an applicant’s salary history. The Act is designed to reduce the gender and minority pay gap and is similar to laws passed in Massachusetts and Philadelphia where it has been challenged and is stayed.

The Act will become an amendment to the New York City Human Rights Law by setting forth a new “unlawful discriminatory practice.” As such, there is a broad range of remedies available for violations.  The Act will be effective on October 31, 2017.

However, employers are permitted to do the following:

• inform an applicant about the proposed salary or range of salary;
• inquire into the applicant’s productivity (revenue, sales, production);
• “engage in discussion” about the applicant’s “expectations,” so long as the employer does not inquire into salary history; and
• consider the applicant’s salary history and verify the history if disclosed by the applicant “voluntarily and without prompting.”

There are also various exemptions from coverage.  For example, the Act only applies to new hires, and not to internal candidates for promotion or transfer. Also, the Act will not apply where a non-salary background check discloses the applicant’s salary history.  In that case, however, the employer may not rely upon the salary history to determine compensation.

To prepare for compliance with the Act, employers and employment agencies should review their job applications to eliminate any salary inquiries. Also, all personnel involved in the interview and hiring process, such as human resources personnel, recruiters, and hiring managers, should be trained to avoid inquiry into, and reliance upon, applicants’ salary history.

This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice. If you have any questions regarding these issues, please contact your Labor and Employment Counsel at Smith, Gambrell & Russell, LLP.