As of October 31st, The New York City Pay History Ban has become the new “law of the land” for all employers in NYC. But, what exactly does this new law require of businesses and how will it affect the day-to-day operations of companies looking to hire their next top talent?
What does the law prohibit?
This new law prohibits all “New York City employers from requesting a job applicant’s salary history, or using a job applicant’s salary history to determine his or her salary, benefits or other compensation during the hiring process, including the negotiation of a contract”. “Salary history” can include, but is not limited to, current or prior wages, benefits, and other forms of compensation such as bonus, commission, and allowances.
What are some provisions and exceptions to the NYC Pay History Ban?
In the event that an employer is already aware of a prospective employee’s salary history or becomes aware through the prescreening process, this bill would prohibit reliance on that information in the determination of salary.
According to SHRM, “if the applicant makes an unprompted and willing disclosure of his or her salary history to the prospective employer, an employer is permitted to verify and/or consider salary history in determining a prospective employee’s salary, benefits, and other compensation”. This law does not apply to internal employees seeking a promotion or transfer.
What are the benefits?
This law has been passed in hopes to close the wage gap between men and women. “Adopting these types of measures can reduce the likelihood that women will be prejudiced by prior salary levels and help to break the cycle of pay inequality in regards to gender”. This law will allow applicants to negotiate wages based on education, experience,and skill set rather than salary history.
This is a popular topic trending in employment law and it would not be surprising to find more states adopting similar policies.