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Paul Zimmerman
pzimmerman@mrllp.com
(310) 564.2670

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Early Halloween Scare For New York City Employers: Salary Inquiries Will Be A Thing Of The Past

New York City employers must be on the lookout for more than just ghosts and goblins this coming Halloween. According to a new law signed by New York City Mayor Bill DeBlasio on May 4, 2017, which goes into effect on October 31, companies in New York City will be prohibited from inquiring about or relying upon the salary history of job applicants – including prior wages, benefits or other compensation – during the hiring process, including the negotiation of a contract.

The new law, simply known as “Intro. 1253,” will reshape how employers conduct job interviews in New York City. Currently, it is quite common for employers in most industries to inquire about an applicant’s salary or compensation history during the course of the hiring process, which assists employers in making decisions regarding pay. Indeed, it is common for employers to include questions regarding current salary on the job application; recruiters typically solicit this information during the intake process with candidates; and the question is inevitably asked about prior pay during the initial interview or as the hiring process progresses and the candidate pool is narrowed.

New York City employers that continue with this approach on and after October 31 will run afoul of the new law, subjecting them to remedial provisions, which include civil penalties of up to $250,000 for willful and malicious violations of the law, and compensatory damages (emotional distress, among others) to victims. The New York City Commission on Human Rights, which will create educational materials and conduct community outreach to ensure that local workers understand their rights, will enforce the law as well.

Intro. 1253 does include provisions that may be viewed as safe harbors, but they seem fraught with peril. Specifically, discussion about an applicant’s “expectations” regarding salary, benefits and other compensation is permitted under the law. Employers are also entitled to verify salary histories and consider them in determining new employee compensation if the information is volunteered without employer prompting. No doubt, these safe harbors may be more “trick” than “treat.” It is easy to foresee the litigation likely to emerge from disgruntled applicants over whether discussions during the hiring process involved the prohibited topic of salary history or the permissible subject of “expectations,” or whether related information was volunteered or prompted.

There has been some reference in the media to business groups challenging the law, but no such challenge has yet to emerge, and it is unlikely that such steps will be taken before the effective date on Halloween. As such, New York City employers are well advised to begin the process of assessing their hiring practices in accordance with Intro. 1253, and to develop guidelines and training for those involved in the hiring process. Doing so may help employers avoid a monstrous October surprise.

This blog post is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.