As we previously blogged here, beginning on October 31, New York City businesses will no longer be allowed to ask about an applicant’s salary history during the hiring process.
Just in time for the law to go into effect, the NYC Commission on Human Rights has published a set of FAQs to help employers and the public navigate through the hiring process under this new law. Below are some key takeaways from the FAQs. According to the Commission’s guidance, this is how the law is expected to be applied.
Whom does the law apply to?
- All businesses with at least one employee in NYC.
- The law does not apply to internal transfer applicants or applicants up for a promotion.
In which situations does the law apply?
- If the salary inquiry occurs in NYC for a job that is outside of NYC, the law will “likely” apply.
- If the salary inquiry occurs outside of NYC, the law could apply if the “unlawful discriminatory practice is felt in New York City.”
What types of inquiries may businesses make on job applications?
- NYC employers may not make requests for salary history on a job application, even if the request is noted as voluntary.
- Employers may not use a boilerplate application that includes a disclaimer. However, questions regarding a job applicant’s salary expectations are allowed.
- Employers may not ask about commissions earned by the applicant. But they may ask about other “objective indicators of performance such as the volume, value, or frequency of sales.”
What about salary inquiries through other third parties?
- Prohibited inquiries include: (1) contacting individuals from the applicant’s current or former employer, (2) searching public records, and (3) searching for specific information about salaries paid to individuals with the applicant’s job title at his or her former employer.
- An employer may not rely upon salary history information that it learned about accidentally.
- Companies that conduct background checks on applicants must exclude salary history information from the report.
How does the law apply in corporate acquisitions?
- Corporations may obtain salary history data of the target company as part of the acquisition process.
- If employees of the target company are being asked to apply for positions with the acquiring entity, the salary history law may apply. In such cases, salary history information from the acquisition should not be shared with the hiring manager.
The NYC law is the latest in a trend that appears to be taking hold nationally restricting use of applicant salary history. These measures are typically seen as a step toward neutralizing gender-based pay disparities.