In the latest development in a growing national trend involving new laws in Massachusetts and Philadelphia and over 20 pending measures across the country, New York City banned employers from asking job applicants their salary history, prompting National Women's Law Center President-elect Fatima Goss Graves to predict that the new law "stands to transform the way that companies operate around the country." Importantly, employers can discuss salary, benefits, and other compensation expectations with an applicant, as well as any unvested equity or deferred compensation the applicant would forfeit or have cancelled by resigning from her or his current employment. The new law, which takes effect in 180 days, will prohibit during all stages of the employment process an employer, employment agency, employee, or agent from:
- Inquiring about the salary history of a job applicant; and/or
- Relying on the salary history of a job applicant when determining his or her salary amount at any stage in the employment process, including when negotiating a contract.
The restriction on relying on salary history does not apply to current employees applying for an internal promotion or transfer. Meanwhile, if an employer's attempt to verify an applicant’s non-salary-related information or conduct a background check results in the disclosure of the applicant’s salary history, the employer is prohibited from relying on the salary information during the hiring process and contract negotiation. The bill is similar to recently enacted laws in other jurisdictions, including Massachusetts, Philadelphia, and Puerto Rico, and many other states and municipalities have introduced similar legislation or are planning to do so in the near future. According to Ms. Goss Graves, "So many companies operate in multiple jurisdictions. If a company changes its practices in New York, it is likely to also make changes around the country."
