New York City made waves this month by imposing new requirements on independent contractor agreements and by passing a law that prohibits employers from asking about or considering an applicant’s prior salary. Although New York City is just the third jurisdiction to adopt a law prohibiting inquiries into an applicant’s salary history (Massachusetts and Philadelphia have already passed similar measures), employers everywhere should take note as it is widely anticipated that other local and state governments will follow suit.
Ban on Salary History Inquiries
On October 31, 2017, New York City employers will no longer be permitted to inquire about an applicant’s prior salary history. The new law, which was passed by the New York City Council with the intent of reducing the gender pay gap between men and women, was signed by Mayor Bill de Blasio on May 4, 2017.
The new law makes it unlawful for employers to make any statement or inquiry to the applicant or the applicant’s current or former employer, or search public records, for the purpose of obtaining an applicant’s salary history, including wages, benefits, or other compensation. Unless voluntarily disclosed by the applicant, employers are prohibited from relying on an applicant’s salary history, for purposes of determining the applicant’s salary, benefits, or other compensation during the hiring or contract negotiation process.
Under the new law, employers are still allowed to:
- Inform the applicant about the position’s anticipated salary or salary range
- Engage in a discussion with the applicant regarding salary, benefits, and compensation expectations, including any unvested equity or deferred compensation that the applicant may be forfeiting upon resignation from his or her current employer
- Consider and verify salary, benefits and compensation history if the applicant voluntarily provides it
Furthermore, the law does not apply to internal transfers or promotions.
Because the bill amended the New York City Human Rights Law, applicants seeking to enforce it may file a charge with the New York City Commission on Human Rights and take advantage of the law’s remedies, including back pay, compensatory damages, and attorneys’ fees.
Prior to October 31, employers that hire in New York City should educate recruiters and interviewers to prevent improper inquiries, and review New York City job applications and hiring protocols for compliance.
New Independent Contractor Rules
The Freelance Isn’t Free Act (FIFA) requires New York City parties that use independent contractors to provide written contracts containing the terms of the freelance relationship. FIFA is the first law of its kind in the country to mandate independent contractor agreements, however, it only covers independent contractors who perform work or services valued at $800 or more within a four-month period. It went into effect on May 15, 2017, and hiring parties must comply immediately.
FIFA requires employers or any hiring party enlisting a covered independent contractor to provide a written contract detailing, at a minimum:
- The name and address of both the hiring party and the independent contractor
- An itemized list of all services to be provided by the independent contractor
- The compensation to be paid including the rate and method of payment
- The date payment is due (or, alternatively, the conditions that will determine the date if unknown)
Under FIFA, the amount of payment may not be reduced once the independent contractor has begun performance under the contract. Additionally, FIFA prohibits hiring parties from retaliating against independent contractors requesting a written contract.
FIFA provides a private right of action. Recoverable damages will depend on the provision violated, however, all violations under FIFA permit the recovery of attorney’s fees.
For more information about either of these new laws, please contact any member of Schiff Hardin’s Labor and Employment Group.