On July 10, 2019, Governor Cuomo signed two amendments to the NY Labor Law addressing pay equity into law that will impact the vast majority of employers across New York State.
The first amendment prohibits employers from using the wage or salary history of applicants in employment decisions such as whether to hire an individual or what wage or salary to offer an applicant. Employers will be prohibited from asking applicants orally or in writing for their salary history and will not be able to ask current employees for salary history as a condition of promotion. Further, employers will no longer be permitted to seek salary history information from current or former employers of applicants or current employees. Lastly, employers cannot refuse to interview, hire, promote, or otherwise retaliate against an applicant or employee who does not provide their salary history.
The amendment permits applicants to voluntarily provide their wage or salary history as long as it is unprompted. In addition, an employer may verify wage or salary history when they have made an offer of employment to an applicant and provided the compensation structure, and the applicant responds with their wage of salary history as basis for higher starting pay.
Finally, the amendment does not supersede any federal, state, or local law enacted prior to the effective date of the amendment that requires the disclosure or verification of salary history information to determine an employee's compensation.
The amendment will allow an employee to commence a private lawsuit for violations of the law and allows a prevailing party to recover attorneys’ fees. It will go into effect on January 6, 2020 and applies to both public and private employers.
The second NY Labor Law amendment is an expansion of existing prohibitions against unequal pay. For the last several years, New York State has prohibited unequal pay for equal work on the basis of sex. The amendment expands this by making it illegal to pay someone less based on protected characteristics, including 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.
In addition, the existing law previously prohibited unequal pay where individuals were performing “equal work.” The amendment expands this aspect to also apply to individuals performing “substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions.” Thus, employees may be compared for pay inequities on the basis of a protected characteristic, even if they do not perform the exact same job.
The Legislature did not modify the existing exception to the equal-pay law that allows employers to pay unequal compensation when the difference is based on a seniority system, merit system, production-based system, or a bona-fide factor other than protected status within one or more protected classes such as education, training, or experience.
This amendment significantly expands the present law. In addition to expanding the law’s coverage, it also extends the time in which employees can bring an unequal pay claim. Currently, employees who believe that they have been paid less because of a protected characteristic can bring claims for unlawful discrimination under the NYS Human Rights Law. While the statute of limitations to bring a lawsuit under the NYS Human Rights Law is three years, the amendment to the pay-equity law allows employees to bring a claim pursuant to the NY Labor Law, which has a six-year statute of limitations.
If you have any questions regarding the content of this alert, please contact Ben Wilkinson, counsel, at bwilkinson@barclaydamon.com or another member of the firm’s Labor & Employment Practice Area.
The expansion to the pay-equity law will go into effect on October 8, 2019.
As a result of these amendments to the NY Labor Law, we expect there to be an increase in the number of pay-equity claims. In the coming months, employers should remove inquiries into prior pay and salary history from applications, hiring paperwork, workplace policies, and other materials. Employers must also ensure their employees who are involved in hiring and recruiting are properly trained to refrain from inquiring into prior pay. Employers should also consider conducting a pay-equity analysis to verify that they are in compliance with the new pay-equity law.