New York State Expands Equal Pay Protections

Q: What do New York employers need to know about the recent amendment to the state’s pay equity law?

A: In November 2015, New York became one of the first jurisdictions to pass a pay equity law that was more extensive than the federal equal pay laws.  On July 10, 2019, Governor Cuomo signed an amendment to New York Labor Law Section 194, further expanding its scope.

Under the current law, employers are prohibited from paying an employee a lower rate than someone of the opposite sex for “equal work” that is performed under similar working conditions. The amended law makes it illegal for an employer to pay an employee less based on numerous characteristics in addition to sex.  These additional protected characteristics include age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, and domestic violence victim status.

The amended law not only expands the current prohibition against gender-based pay inequity, but it also requires equal pay for “substantially similar work,” as opposed to the previous requirement of “equal” work. Specifically, it requires only a showing that employees are engaged in “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”

Employers should be aware that a violation of this law could result in an award to an employee of attorney’s fees and triple damages.

Importantly, the new pay equity legislation will still maintain four exceptions protecting employers from liability where employees do not receive equal pay for substantially similar work. These are where pay is based on a:  (1) seniority system; (2) merit system; (3) system which measures earnings by quantity or quality of production; and (4) bona fide factor unrelated to protected class status (such as education, training or experience) that is job-related and consistent with business necessity.

This new legislation will take effect on October 8, 2019.

Next Steps for Employers

These developments follow the trend of the equal pay movement taking place in cities and states across the country. It is recommended that employers review their payroll to ensure that salaries, hourly rates, benefits and all forms of compensation are equal among employees performing substantially similar work.  As a reminder, when evaluating what is “substantially similar work,” the focus should be on the job duties being performed and not simply on job titles.

For assistance in ensuring that your policies and practices comply with this amendment, we recommend consulting with labor and employment counsel.

Leigh McMonigle

Portion of Philadelphia Salary History Ban Ruled Unconstitutional

Q.  Am I permitted to ask about an applicant’s salary history in Philadelphia?

A.  In a ruling that could provide a roadmap for challenging salary history bans in other jurisdictions, a Philadelphia federal judge issued an opinion on April 30 invalidating a major element of the Philadelphia salary history ordinance enacted by the city in January 2017. Judge Mitchell S. Goldberg held that the portion of the ordinance prohibiting an employer from inquiring about a prospective employee’s wage history is unconstitutional because it violates the First Amendment’s free speech clause. However, Judge Goldberg also held that the portion of the law prohibiting employers from relying on wage history to determine a salary for an employee did not implicate constitutional concerns. Philadelphia employers now find themselves in a difficult position: They are permitted to ask about an applicant’s salary history but cannot rely on that information.

For more information, please click here.

Tracey E. Diamond and Lee E. Tankle

 

Employers Not Required to Submit Pay Data or Follow Higher Salary Basis Threshold for Exempt Employees

Q.  What is the status of the EEOC’s requirement that we submit pay data with our annual EEO-1 Form?  Also, have there been any updates on the lawsuit blocking the DOL’s rule raising the salary basis for certain non-exempt employees?

A.  As we reported previously, the EEOC, as part of its effort to detect and remedy pay discrimination, amended its EEO-1 Form to require that employers with 100 or more employees submit detailed pay data on their workforce.  On August 29, 2017, the OMB sent a memorandum to the EEOC, staying implementation of this requirement.  Thus, at least for now, employers may limit the information provided on the EEO-1 Form to data on race, ethnicity and gender by occupational category (but not data on pay or hours worked).

There is similar relief for employers on the DOL overtime issue.  As we reported in a previous blog post, the United States District Court for the Eastern District of Texas granted a preliminary injunction last November, blocking the implementation of the Department of Labor’s amendments to the overtime provisions of the Fair Labor Standards Act.  On August 31, 2017, the Court took a further step, granting summary judgment blocking the rule.  The Court concluded that the Department of Labor exceeded its authority in enacting a rule raising the minimum salary threshold for executive, administrative and professional exemptions.  This likely is the official end to President Obama’s Final Overtime Rule, although President Trump may revisit the issue of the minimum salary threshold in the future.

For more information on these issues and their impact on employers, please see our Client Alert.

Lee Tankle

New York City Ban On Applicant Salary History Inquiries Effective October 31, 2017

Q. When will the new salary history law go into effect in New York City?

A. Effective October 31, 2017, employers are barred from asking job applicants in New York City about their salary history. The bill, which was passed by the New York City Council in early April, was signed into law by Mayor Bill di Blasio on May 4, 2017.

Salary history includes “current or prior wage, benefits, or other compensation.” The ban includes inquiries to an applicant’s current or former employer and searches of publicly available information for salary history.

To ensure compliance, employers should ensure that job applications for positions in New York City do not include inquiries about salary history. Employers should also update their internal policies and interviewing guidelines to ensure all relevant personnel are aware of the change.

For additional information, please see our previous post on the new law here:

– Jessica Rothenberg

New York City Employers May Not Inquire About Applicants’ Salary History

Q.  My company has employees in New York City.  We often ask applicants about their salary history as a starting point for negotiating and setting a new salary.  Are we still permitted to do this?

A.  Effective October 2017, it will be unlawful for employers to ask job applicants in New York City about their salary history.  Salary history includes “current or prior wage, benefits, or other compensation.”  The ban includes inquiries to an applicant’s current or former employer and searches of publicly available information for salary history.

The new law provides that employers can still engage in discussion with an applicant about his/her expectations with respect to salary, benefits, and other compensation, so long as the employer does not inquire about salary history or rely on salary history for determining compensation. Employers can also continue to run background checks and verify an applicant’s disclosure of non-salary related information. However, if the verification or background check discloses the applicant’s salary history, then the employer cannot rely upon it for determining salary.

Prospective employees can volunteer salary history (so long as it is “without prompting”), and in those cases, the employer can consider salary history in determining salary, and can verify the applicant’s salary history.

The new legislation aims to combat pay inequity by preventing employers from perpetuating pay inequity applicants may have experienced in the past. Such legislation has also recently been passed by Philadelphia (effective May 2017), as well as in numerous other cities and states. In 2016, Mayor Bill de Blasio issued an executive order prohibiting New York City agencies from asking prospective employees about their pay history.

The Philadelphia and New York City laws have many similarities. Like the New York City law, the Philadelphia law broadly defines wages as “all earnings of an employee,” including fringe benefits, wage supplements and “other compensation.” The Philadelphia law is enforced by Philadelphia’s Commission on Human Relations, and the New York law is enforced by its equivalent agency, the New York City Commission on Human Rights. Both laws provide that applicants can volunteer salary history, in which case the employer can rely on it to determine the new salary.

To prepare for this law, employers should ensure that job applications for positions in New York City do not ask about salary history. Employers should also update their internal policies and interviewing guidelines to ensure all relevant personnel are aware of the change. Employers who have employees both in and outside of New York City should consider whether to make such changes company-wide, or only to applicants for New York City positions.

Jessica Rothenberg