By GAPS • June 7, 2017
New York City will become the third jurisdiction of the United States to consider an inquiry into the salary history of a prospective employee an “unlawful discriminatory practice.” This means that, unless an applicant voluntarily offers their own salary history, it will become illegal for an employer to request this information. After approval by the New York City Council, the legislation was signed into law by Mayor Bill de Blasio on May 8 of this year and will go into effect on Halloween, October 31.
Included in this law are measures against not only direct requests of the information from candidates, as well as research through publicly accessible information and figures provided by past employers. The legislation considers “salary history” to include the applicant’s current or former wages as well as any benefits or other compensation.
Naturally, employers may still discuss compensation with a potential employee, in the form of salary expectations, ranges and benefits. However, these changes require direct action and conscious changes within hiring practices by employers and recruiters working in the City of New York. Companies must ensure that all personnel involved in their hiring process are aware of the law in full in order to avoid a claim and, ultimately, a hefty fine.
While a purposeful and “malicious” violation of the new law is punishable with a fine of as much as $250,000, even an inadvertent inquiry will cost a company up to $125,000. These regulations will be enforced by the New York City Commission on Human Rights. Those affected by violations to these new provisions will be entitled to compensation via backpay, lawsuits and reimbursement of attorney fees.
This law is just one in a series directed at reducing, with the ultimate goal of eliminating, the wage gap existing between men and women in the United States. Many companies justify the gross difference in average salary of men and women by their salary history, as, in many cases, men’s salaries are notably higher.
These actions in New York follow recent legislation in Massachusetts and Philadelphia, both set to come into effect next year. It appears that this may become a nationwide trend in the coming years, as many states and localities are beginning to consider enacting similar legislation. It’s time to get ready!
While these new policies will certainly affect the recruitment process in these regions, there are many methods to match a candidate with a proper position without requesting their salary history.
In your usual evaluation of a candidate’s background, a close review of their résumé and LinkedIn profile - the progression, accomplishments, promotions and shifts - will give you at the least a rough idea of their past and probable current salary range. Rather than asking for salary and benefit history, discuss what the candidate’s expectations are for making a change.
When any candidate inevitably asks for the salary range, you may of course share this if you wish. A smart close on the least amount they are willing to accept is always a recommended course of action.
So long as we all remain conscious of these new regulations, as well as adhere to them, the new policies coming into law in New York City as well as the other locales should not create a major change in the way we conduct business.