Employers who make enquiries about a job applicant’s current or previous salary may be at risk of perpetuating a pay discrimination cycle, with a prior history of being underpaid effectively ‘anchoring’ the applicant to a figure that is already too low.
In recent times New York City has been incredibly active in introducing amendments to Human Rights Law in relation to employment. They have passed bills aimed at preventing employers from discrimination against individuals in terms of previous or current unemployment and prior convictions for criminal offences. They have also restricted the ability of organisations to conduct credit checks on new hires to instances where a relevance to role, or profession, can be clearly demonstrated. The recent move to ban salary enquiries is the latest in this raft of human rights driven legislation and focuses on affording individuals further protection against race and gender related pay discrimination.
From the 31st October 2017, it will now also be illegal, in most instances, for employers to make a verbal or written inquiry to an applicant, or the applicant’s current or prior employer, to obtain their salary history. It will also be illegal to search public records for an applicant’s salary history, or to rely on details of their salary history when making an offer of employment.
As ever, provisions have been made for a number of exceptions to the new rules. Employers will be able to consider and verify an applicant’s salary history if the applicant discloses the information voluntarily and without prompting. Similarly, the rules will not apply where there is federal, state, or local law which specifically authorises the disclosure or verification of salary history, where salary is determined by procedures in a collective bargaining agreement, or where current employees are transferred, or promoted within the company.
Prior to October 2017 employers will need to remove questions relating to previous salary from any job application questionnaires and any templates used to request references in respect of previous employments. It is worth noting that if the employment screening process inadvertently identifies salary history on an employee – for example if a payslip is presented as evidence of employment which cannot be confirmed at source – the employer will not be in breach of the legislation as long as they do not rely on that information when making an offer of employment.
The concept of banning salary enquiries is already starting to spread. Massachusetts, and the city of Philadelphia have already implemented equivalent measures and it is anticipated many employers with NYC offices may seek to adopt a consistent approach across all their locations as a point of best practice. Where organisations also have locations overseas, it will be interesting to note whether these changes extend beyond the US borders.