Regular readers of this column will no doubt recall that in recent years there have been a number of new and updated labor laws passed by state and local governments impacting transportation companies doing business in the City of New York. The City Council has been at the forefront of much of this legislative activity, and among the laws the Council has recently implemented are laws that prohibit employers within the City from asking employees about their salary history, and laws that prohibit paying employees differently based upon protected characteristics (such as gender or race).
These protections will soon be extended throughout the State of New York as a result of bills recently passed by the New York State Legislature, that were signed into law by Governor Andrew Cuomo on July 10, 2019. The changes go into effect in 180 days. Employers within the state should take note of these laws and adjust their hiring and pay practices accordingly.
Restriction on Salary History Inquiries
The first bill amends New York’s Labor Law by prohibiting employers from inquiring into the salary histories of prospective employees, and the salary histories of current employees seeking different positions within the same company. The new law provides that an employer is barred from relying on the wage or salary history of an applicant in determining whether to offer employment to such individual or in determining the wages or salary for such individual. Prospective or current employers may not request or require that a job applicant divulge their salary history, orally or in writing, as a condition of being interviewed, employed or promoted. Likewise, a prospective or current employer may not refuse to interview, hire, promote or retaliate against an applicant (or current employee) based upon his or her prior salary history or salary history.
The law does provide exceptions for salary information voluntarily disclosed by a candidate. If you offer a job candidate a salary of “X’ and the individual voluntarily and without prompting responds that he or she made more at his/her prior position and states what that prior salary was, there has not been a violation of the law. Likewise, if an offer of employment is extended along with a wage or salary and the applicant seeks to negotiate their pay by providing information regarding their prior wage or salary, it is acceptable to confirm what the applicant earned with the applicant’s prior employer.
An applicant or current or former employee aggrieved by a violation of the law is entitled to bring a civil action in court to recover any damages sustained as a result. Additionally, the aggrieved plaintiff may obtain injunctive relief, as well as reasonable attorneys’ fees should he or she prevail.
Equal Pay for Equal Work
New York already had an equal pay law on the books that prohibited employers from paying employees differently based upon their sex. The prohibition has now been expanded to cover discrimination in pay due to age, race, color, creed, national origin, military status, disability, sexual orientation, gender identity or expression, marital status and other protected characteristics. Additionally, whereas the law originally prohibited pay discrimination among employees performing “equal work,” it now also prohibits such discrimination among those performing “substantially similar work.”
This change makes it easier for employees to bring wage discriminations claims. In the past, an employee had to allege that she was employed in position “X” and her male counterpart employed in position “X” made more in order to raise the presumption that the difference in pay was due to gender. That employee now has the option of claiming that although her male co-worker works in position “Y,” the skill and responsibility associated with two positions is “substantially similar,” such that the reason he is paid more is presumptively due to the fact that he is male.
The foregoing is not to say that everyone who falls within a protected category is entitled to be paid the same as co-workers holding the same or similar positions, who don’t fall within that category. An employer is entitled to pay employees differently based upon criteria such as seniority, merit, job performance, education and experience. The criteria used to justify pay differentials must, however, be job related. It’s perfectly ok, for example, to pay a white male telephone operator who has been working for you for 20-plus years more than a black female operator who has never worked as an operator and who started last week. The pay differential in this example is permissible and non-discriminatory, as it is based upon seniority and experience, not race or gender. If, however, these two operators were to be hired at the same time with zero experience, and you offered the white male operator more money because he has an accounting degree and the black female does not, you would be violating the law. That is because an accounting degree is not required to work as a telephone operator, and absent some other explanation as to why the white male is being paid more than the black female, the presumption is raised that the difference is due to race and gender.
In conclusion, it is important that all personnel responsible for interviewing and hiring new employees, and for approving position and salary changes within your company, be brought up to speed with respect to these changes to the law. Improperly prying into a candidate’s salary history may result in a lawsuit. So too can paying employees who fall within one or more protected categories wages that trail those of co-workers who do not fall within those categories. Should you have questions regarding your company’s obligations, as always we recommend that you discuss them with your attorneys, PEO and/or other advisors.