The New York City Council has approved a bill that would make it unlawful for employers to inquire into or rely upon job applicants’ wage history during the hiring process, with limited exception.  The bill now goes before Mayor Bill de Blasio and, if signed, will become effective 180 days following signature.

As we previously reported, New York City Public Advocate Letitia James first introduced this legislation in August 2016.  As approved by the City Council, the bill amends the New York City Human Rights Law to prohibit employers, employment agencies, and their agents from:

• inquiring about an applicant’s salary history; and/or
• relying on an applicant’s salary history in determining the salary, benefits or other compensation for that applicant during the hiring process, including as part of the negotiation of a contract.

The bill defines “inquiry” broadly to mean “any question or statement to an applicant, an applicant’s current or prior employer, or a current or former employee or agent of the applicant’s current or prior employer, in writing or otherwise, for the purpose of obtaining an applicant’s salary history,” as well as searching publicly available records. It does not, however, include informing an applicant about a position’s  proposed or anticipated salary or salary range.

“Salary history” is also defined broadly to include an applicant’s “current or prior wage, benefits or other compensation,” though it does not include any “objective measure of the applicant’s productivity, such as revenue, sales or other production reports.”

The approved bill also has evolved from its originally proposed form to include certain carve outs, presumably to address concerns raised by businesses and employers during the legislative process. Under the approved bill, employers may consider (as well as verify) salary information for the purpose of formulating salary, benefits and compensation where a prospective employee voluntarily and without prompting discloses his or her salary history.  In addition, employers may, without inquiring about salary history, engage in discussion with an applicant about his or her expectations with respect to salary, including in situations involving unvested equity or deferred compensation that would be forfeited should the applicant leave a current position.

The bill would not apply:

• to “applicants for internal transfer or promotion with their current employer”;
• where federal, state or local law specifically authorizes disclosure or verification of salary history or “specifically requires knowledge of salary history to determine an employee’s compensation”;
• in the context of conducting a non-salary related background check, provided that if the background check discloses an applicant’s salary history, such information cannot be relied upon for determining compensation of such applicant during the hiring process; and
• for public employee positions for which salary, benefits or other compensation are determined pursuant to procedures established by collective bargaining.

It is likely that Mayor de Blasio will sign the bill into law, particularly given that, in 2016, the Mayor issued Executive Order 21, which imposes similar prohibitions on city agencies regarding inquiring about the salary history of job applicants.  With this bill, New York City follows in the footsteps of other jurisdictions that have recently passed similar measures, including Massachusetts and Philadelphia.

We will continue to report on any further developments.