The states of New York and New Jersey continue to be aggressive in pushing new equal pay laws.
The New York State legislature passed an amendment to the state labor law signed into law by Governor Cuomo that would prevent employers from asking for wage or salary history from job applicants and the applicant’s former employers. Under the amendment, employers are prohibited from requesting, requiring, or seeking a job applicant or current employee’s salary or wage history as a condition of employment, a condition to receive an interview, a condition of an offer of employment, or a condition for continued employment or promotion. In addition, employers also are prohibited from relying on salary or wage history in determining whether to offer employment or in determining what wages or salary to offer a job applicant. This law will go into effect January 2020.
In another amendment to the state labor law, the state expanded equal pay protections beyond gender. Starting October 2019, protection under the law is extended to include protected classes such as age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, and domestic violence–victim status. The law also broadens the groups of employees that may be compared for the purposes of equal pay. Previously the standard was to compare employees performing “equal work”; now the standard will be to compare employees performing “substantially similar” work.
In New Jersey, a new law was passed banning employers from inquiring into the salary history of a job applicant. The salary history law makes it illegal for employers operating in the state to inquire into the previous salary and compensation history of job applicants. Employers who are found to be in violation of the law may receive fines as high as $10,000. It will take effect in January 2020.
The new salary history ban is just one of the many initiatives the state has launched in efforts to close the gender wage gap. For instance, New Jersey’s Diane B. Allen Equal Pay Act is widely considered to be the most aggressive pay equity law in the United States, based on its expansion of protected classes, mandated pay data reporting for companies doing business with the state, and steep penalties for non-compliance.
The law requires any business that enters into a qualifying services or public works contract with the state (including with state agencies) to submit an annual pay data report to the New Jersey Department of Labor and Workforce Development. This includes out-of-state contractors doing work in the state. New Jersey’s EPA pay data reporting legislation mirrors the “Component 2” pay data reporting now required to be filed in the federal EEO-1 report.
Both states join other states and local governments that have approved similar legislation prohibiting employers from inquiring into the salary history of job candidates.
Employers with operations in the state of New York and New Jersey, along with employers operating in other jurisdictions with similar pay equity laws, should consider taking the following actions:
Review hiring processes to ensure staff and hiring documentation do not elicit previous salary history information.
Employers should be sure that if pay differences exist, they can be substantiated with reasons allowed by law, such as a seniority system, a merit system, or a system that measures earnings by quantity or quality of production.
Conduct a proactive pay equity audit to identify any pay disparities that may exist. Doing so may give your organization a head start on achieving pay equity and minimize the risk associated damages, legal fees, and negative PR.