By Mark F. Kluger and William H. Healey
Will it never end? In what seems like an arms race to keep up with San Francisco and de Blasio’s effort to show Cuomo that he’s the most employee friendly leader ever, New York City has recently imposed more legal burdens on employers.
New York City already has its own Human Rights Law, which is broader than the state version and makes Title VII look like a Confederate statute, the Fair Chance Act, which prohibits employers from making pre-hire inquiries into criminal convictions (which gives employers a fair chance of hiring a murderer), a commuter benefits law, a paid sick leave law (that last week was further amended to require paid time off for victims of domestic violence), and now a ban on inquiries into an applicants’ salary history.
On October 31, 2017, the City’s salary history ban went into effect, prohibiting employers from asking applicants about their prior compensation. The law amends the NYC Human Rights Law and makes it unlawful discrimination for an employer to make any inquiry into salary history, the definition of which includes all benefits and any form of compensation, at any time during employment, even when negotiating a contract. As if that were not restrictive enough, the law even prohibits an employer from searching publicly accessible records which reveal an applicant’s prior compensation. So essentially, the new employer’s competitor and his next door neighbor can know the salary history, but just not the actual new employer. Employers may, however, ask an applicant about their compensation expectations and consider any salary information disclosed voluntarily without prompting. And good luck employers, proving in a lawsuit that there was no prompting.
The goal of this law and the ones like it in Massachusetts, Delaware, shockingly California and San Fran, New Orleans, and Philadelphia (which is on hold pending a lawsuit based on the 1st Amendment), is to reduce the gender pay gap by preventing lower pay for women from following them to their next job. Whoever came up with this remedy may have had a logic gap in their thinking. Employers blindly determining a new hire salary, especially for a woman they want to hire, will be left to guess the right price and will quite likely guess low. What is illogical, particularly during this period of low unemployment, is that employers know that they will not entice any employed candidate to make a lateral compensation-based move. So forget those situations where an employer, knowing the candidate’s salary history, will go higher to get the employee (of any gender) in the door.
Early research confirms this theory, which we thought of all by ourselves without the benefit of the following data. A survey recently conducted by the comp data software company, PayScale, reveals that women who refused to disclose their salary history in an interview when asked, were offered 1.8% less than women who did disclose. While some of that might be caused by the employer thinking if she’s refusing to answer questions during a pre-offer interview, what kind of a handful will she be when she is employed, it is also likely that the employers are just guessing low. We’ll see what happens when these laws have been in effect for a few years. Good luck NYC.
Don’t get your Giblets in an uproar when you don’t hear from us next week….just enjoy the peace and quiet without us and then be prepared for our upcoming series on what to do about this years’ holiday party. Heaven help us all.
We hope you all have a happy Thanksgiving!