Recently, Governor Andrew Cuomo signed two significant bills expanding the scope of anti-discrimination laws in the New York workplace. Specifically, on July 10, 2019, Governor Cuomo signed Senate Bill 6549, prohibiting employers from inquiring about applicant and employee salary history, and Senate Bill 5248B, expanding pay protections under the New York Equal Pay Act.
Expansion of Equal Pay Protections
The recently enacted New York Senate Bill 5248B, which goes into effect on October 8, 2019, expands anti-discrimination protections under the New York Equal Pay Act by mandating equal pay among all protected categories under the New York State Human Rights Law – not just sex. Specifically, employers may not pay an employee who is a member of a protected class less than an employee outside of the same protected class in the same establishment for: (a) equal work performed under similar working conditions and on a job requiring equal skill, effort, and responsibility or (b) substantially similar work, when considering skill, effort, responsibility, and working conditions. Indeed, these equal pay protections now apply to the protected categories of age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, or domestic violence victim status, or other status protected by law.
The new law contains the previously enacted permissible factors for wage differentials, which are compensation differences based on a: (a) seniority system; (b) merit system; (c) system which measures earnings by quantity or quality of production; or (d) bona fide factor other than the protected status, such as training, experience, or education. The employer, however, must be able to demonstrate that the bona fide factor is job-related, consistent with business necessity, and cannot be based upon or derived from a pay differential based on status within a protected class.
According to the current state of the law, which Senate Bill 5248B confirms, an employee may still prevail on a discrimination claim when he or she demonstrates that: (a) the employer’s practice causes a disparate impact on the basis of status within one or more protected class or classes; (b) an alternative employment practice exists that would serve the same business purpose and not produce such a pay differential; and (c) the employer refused to adopt such alternative practice.
Importantly, an employee bringing such a suit can currently seek liquidated damages of up to 300% of unpaid wages for willful violations, as well as the ability to recover attorneys’ fees. The new law also authorizes the New York Department of Labor to assess penalties for pay inequities among protected classes of up to $500 per violation.
As a result of the passage of this law, New York employers should review their compensation and benefit programs to assess whether any potentially improper pay differentials exist. If any differentials exist, employers should be prepared to justify the differential among employees performing equal or substantially similar work. Employers should contact counsel with any questions or if any assistance is needed in conducting pay equity audits.
Salary History Inquiry Ban
Pursuant to New York Senate Bill 6549, which will take effect on January 6, 2020, employers of all sizes are prohibited from:
- Relying on the wage or salary history of a job applicant in determining whether to offer employment or in determining the wages or salary of such applicant;
- Orally or in writing, seeking, requesting, or requiring the wage or salary history from an applicant or current employee as a condition to be interviewed, or as a condition of continuing to be considered for an offer of employment, or as a condition of employment or promotion;
- Orally or in writing, seeking, requesting, or requiring the wage or salary history of an applicant or current employee from a current or former employer, current or former employee, or agent of the applicant or current employee’s current or former employer;
- Refusing to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current employee based upon prior wage or salary history;
- Refusing to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current employee because such individual did not provide wage or salary history in accordance with the law; and
- Refusing to interview, hire, promote, otherwise employ, or otherwise retaliate against an applicant or current or former employee because the individual filed a complaint with the New York Department of Labor alleging a violation of the law.
Notably, the law contains carve outs for the following disclosures:
- Applicants and current employees are permitted to voluntarily, and without prompting, disclose or verify their salary history, including for the purposes of negotiating compensation; and
- Employers may confirm wage or salary history if at the time an offer of employment with compensation is made, the applicant or current employee responds to such offer by providing prior wage or salary information to support higher compensation than what was offered by the employer.
The law specifically states that it shall not be interpreted to take away any right or remedy of any applicant or current or former employee under any other law, collective bargaining agreement, or employment contract. The law explicitly also provides that it does not supersede any federal, state, or local law that was enacted prior to the effective date of the law that requires the disclosure or verification of salary history to set an employee’s compensation. This is significant because, as we previously reported, salary history inquiry laws have been passed in New York City, Suffolk County, Westchester County, and Albany County. That being said, Westchester County’s law will be void on the effective date of Senate Bill 6549 because the Westchester County law provides for nullification upon the effective date of statewide legislation.
The law provides legal remedies to individuals seeking redress for any violation of this law and the ability to bring a civil action on behalf of similarly situated persons. Employers who violate this law may be liable for injunctive relief, compensatory damages, and reasonable attorneys’ fees.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.
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