New York Expands Pay Equity Law

22 July 2019 Labor & Employment Law Perspectives Blog
Author(s): James M. Nicholas

On the day that New York State honored the U.S. women’s soccer team for their World Cup victory – a team whose members have publicly demanded pay equity with the U.S. men’s soccer team – Gov. Andrew Cuomo signed legislation amending the state’s pay equity law, which previously required equal pay for women and men performing “equal work.”  

The new law now extends its protections to employees, job applicants or interns based not only on gender but on any protected class recognized under the New York State Human Rights Law, which includes age, race, color, creed, national origin, sexual orientation, disability, gender identity, and familial/marital status, among several other categories of protected characteristics. Once the amended law takes effect on October 8, 2019, employees in any of these protected classes will be permitted to proceed with pay equity claims based not just on gender, but on any of these protected characteristics. 

In addition, the new law now requires equal pay among employees who perform “substantially similar” work, when the jobs being compared are “viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” The “substantially similar” threshold, in effect, establishes a lower standard than the previously used “equal work” threshold.  In other words, an employee will be able to establish a violation of the statute even where his or her job is not identical to that of a comparator who does not share the employee’s protected class status.   

Notwithstanding these changes, employers in New York State are still permitted to rely on a variety of permissible factors to justify wage differences among employees.  Such factors include:

  • Differences in geographic location (i.e., employees in Manhattan can be paid more than employees in Syracuse)
  • Bona fide seniority or merit systems
  • “[A] system which measures earnings by quantity or quality of production”
  • “[A] bona fide factor” other than protected status, such as education, training, or experience, provided that the employer can establish that the “bona fide factor” is job-related and consistent with business necessity.

In addition to the amended pay equity law, Gov. Cuomo also signed a new law prohibiting employers from asking applicants or current employees for their wage or salary history. Effective January 6, 2020, New York State employers are prohibited from:

  • Requesting or requiring that a job applicant or current employee provide salary history as a condition to being interviewed or considered for an offer of employment, or as a condition of employment or promotion;
  • Using a job applicant’s compensation history when considering whether to offer employment or in determining the salary to be offered in connection with an offer of employment;
  • Seeking an applicant’s or employee’s compensation history from a current or former employer; or
  • Declining to interview, hire, promote, or otherwise retaliating against, a job applicant or current employee based on his or her compensation history or because the applicant or employee refused to provide the requested compensation history.

Despite these prohibitions, nothing in the law prevents an applicant or employee from voluntarily disclosing his or her compensation history for purposes of negotiating a compensation package from an employer. Under these circumstances, an employer is allowed to verify salary history with an individual’s previous employer, but only after an offer of employment has been extended to the applicant and the applicant has rejected it based on previous compensation.

New York State employers should take measures to ensure that they are ready to comply with these new requirements by their effective dates. And employers everywhere should pay attention to developments on the state and local wage front, as issues of pay and pay equity continue to occupy center stage.

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