Employers in the Big Apple will soon be restricted from asking prospective employees to disclose salary history under a measure passed Wednesday.

In a 47-3 vote, New York City council members approved the bill that prohibits public and private sector employers from using an individual’s salary history to determine a new salary offer.

“Just one underpaid position can set an individual on a course of underpayment lasting their entire professional life,” Speaker Melissa Mark-Viverito said of the bill.

Employers, meanwhile, are cautioned to remain vigilant in their hiring practices as such legislation would present challenges for some companies.

[Image credit: Bloomberg]
[Image credit: Bloomberg]

“The law poses a more significant issue for smaller companies without a structured HR department, as it provides a litigation threat to the unwary employer that has less formality to the hiring process,” warns Marc Zimmerman, a partner at the law firm Phillips Nizer.

It is important, he notes, that the law will not prevent an employer’s consideration of salary history if an applicant willingly, and unprompted, discloses the information. But that may be a trap for the unwary, as potential candidates can allege there was no such willing disclosure.

“Such inquiries may be less important for larger companies, who likely will be in a better position than smaller ones to access and analyze market compensation metrics for particular positions,” Zimmerman adds.

Employers should revisit their reference and background check procedures to ensure compliance, Zimmerman says. Additionally, “employers certainly should review and revise their form applications and interview processes to ensure the questions and topics covered do not implicate disclosure of salary history.”

Philadelphia earlier this year became the first city in the nation to make such a move. Other measures are also in the works, as seen in New Jersey, Pittsburg and Washington, D.C.

NYC Mayor Bill de Blasio is expected to sign the legislation, but requests for comment were not returned by publication time.

Register or login for access to this item and much more

All Employee Benefit News content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access