New York Employers Can No Longer Request Salary History

In New York City, new hires have an improved shot at overcoming pay inequality: Their employers are no longer allowed to ask them about their salary history. Mayor Bill De Blasio just signed into law an ordinance that will formally take effect in October, affecting both public and private employers.

It’s an important step in the fight for pay equality — and a particularly timely one. A federal appeals court recently determined that it was acceptable to pay women less than their male coworkers, as long as salary history is the basis for calculating compensation.

This ruling, of course, has the effect of entrenching pay disparities, as women consistently make less than men — and the disparity is even more striking for women of color.

Massachusetts is the national leader on this issue. In 2016, the state barred soliciting information about past salaries. Now, New York joins Philadelphia on the list of cities that have considered this approach to pay equity and put it into action.

Under the law, employers can’t ask about past pay scales, nor may they conduct research to suss out that information on their own. Potential new hires or people negotiating contracts may still provide that information voluntarily.

Ample evidence shows that women tend to make less than men overall, and some of that difference stems from being offered less money for performing the same work.

From the start, women generally earn less, illustrating that this is a systemic problem — and one that can become entrenched when the pay increase that comes with a new job is based on past salary. Furthermore, when women try to negotiate, they’re often penalized in a way that men are not – one reason some companies have banned salary negotiations.

There are lots of factors employers can use when weighing how much to offer a new hire in New York, including the person’s education, experience, skills or documented past performance. And it’s entirely legal to request evidence for all these things during the hiring and job offer process. One question they won’t be able to ask, however, is how much someone made.

The bill was written and championed by New York’s Public Advocate, Letitia James, who claims New York City women lose almost $6 million to the pay gap every year. James argues that “being underpaid once” can create a snowball effect that puts a woman at a permanent disadvantage.

Should new hires feel they’ve experienced discrimination — as for example, if they are pressured to disclose past salary history — they can file a complaint with the city’s Human Rights Commission. If an investigation confirms a violation, employers may have to pay a fine of up to $250,000 — a pretty solid incentive to comply with the regulation.

Naysayers who claim that unequal pay doesn’t exist or think such laws are unnecessary should pay close attention to New York. It’s highly likely that researchers will use the city to explore how such laws affect pay inequality. While it may take many years to see the long-term effect of this law, it should yield some fascinating data across one of the most expensive cities in the world.

Will New York’s women — especially women of color — find themselves on more equal footing after five years of this legislation, or ten? Proponents certainly hope so, as this could prompt other cities and states to follow suit.

Photo credit: WOCinTech Chat

65 comments

Ellie M
Ellie Mabout a month ago

ty

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Marie W
Marie Wabout a month ago

Thanks for sharing.

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Greta H
Greta H5 months ago

Good.

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Carl R
Carl R5 months ago

Thanks!!!

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Jennifer H
Jennifer H5 months ago

Smart move New York. This must become national.

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Jerome S
Jerome S5 months ago

thanks

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Jim Ven
Jim Ven5 months ago

thanks for sharing.

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Carl R
Carl R5 months ago

Thanks!!!

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Joan E
Joan E6 months ago

I like the idea of not being stuck in low-paying jobs due to one's past low-paying jobs. Who's to say that some people aren't just getting bad breaks, or are discriminated against because of their color or gender or religion or appearance? Who's to say that those who are making big salaries really deserve that? Our society favors the haves way too much.

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william Miller
william Miller6 months ago

thanks

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