Changes to New York state law that prohibit employer inquiries into the salary history of applicants and employees took effect on January 6, 2020.  Recently, the New York Department of Labor released a series of Frequently Asked Questions (FAQs) to further clarify this law. The FAQs provide insight on which employers and workers are covered, employers’ responsibilities under the law, and how employees or applicants can address potential violations.

The new salary history law prohibits employers from asking applicants or current employees for their wage or salary history as a condition of consideration for employment or promotion, and from asking other employers for that information. Employers also cannot refuse to consider, employ or promote an applicant or current employee based on their salary history or their refusal to provide salary history information. The law also generally forbids employers from relying on salary history in setting an applicant’s pay rate, but does not prohibit individuals from voluntarily disclosing such history, including for the purpose of negotiating their wages. The law allows an employer to verify an individual’s salary history if the applicant rejects an existing offer of compensation while citing to their prior salary.

Which Employers are Covered? While the law itself did not specify, the FAQs state that employers covered by the salary history ban do not have to be based in New York. It applies to positions located primarily within the state, “even if the interview process takes place virtually, via telephone or in another state.” Further, the FAQs reiterate the law’s provision that all public and private employers with workers based in New York are covered, including public authorities.

The FAQs explicitly state that the new law applies statewide, including in New York City. Notably, while the existing New York City Human Rights Law (NYCHRL) already bans employers from asking for or using salary-history information, the NYCHRL applies only to new applicants, and does not cover current employees under consideration for promotions. However, due to a recent amendment to the NYCHRL, the city’s salary history restrictions arguably protect freelancers and independent contractors, while the state law (according to the FAQs) does not. Because the laws are different in some key respects, New York employers with operations in New York City should be careful to comply with both laws.

Who is Covered? The FAQs reiterate that current employees and applicants are covered by the law, and define an applicant as “someone who took an affirmative step to seek employment with the employer and who is not currently employed with that employer, its parent company or a subsidiary.” This definition includes seasonal and part-time employees “regardless of their immigration status.” The guidance clarifies that while employers may use salary information “already in their possession” about current employees when calculating a potential raise, the employer may not ask about income from other jobs. As noted earlier, the FAQs explain that the state law does not apply to independent contractors and freelance workers unless they are to work through an employment agency.

Employer Responsibilities. The FAQs remind employers that they may not ask for salary history information but instruct that they may ask about an applicant’s salary “expectations.” The FAQs advise employers to refrain from providing any “optional” questions about previous pay rates on application forms so as not to appear to be asking for salary information. While the law prohibits employers from considering or verifying salary information unless it is first voluntarily provided, the FAQs further state that even if volunteered, employers cannot use the salary history to justify pay differences between different protected classes performing substantially similar work. Employers also may not seek or obtain information on an applicant’s past salary from sources other than the applicant, such as a former employer, except where required by federal, state, or local law as of January 6, 2020.

In addition, the FAQs note that the law does not compel employers to post a pay scale for a position, although collective bargaining agreements may impose such a requirement.

Employee Rights. The FAQs reiterate that employers may not retaliate against an applicant or employee for refusing to provide past compensation information or for filing a complaint.

Next Steps. New York employers should train hiring personnel, and review their job applications and hiring processes to ensure compliance, including by removing any application questions that seek an applicant’s salary information, unless required by law.