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California on the Hudson? NYC Outlaws Inquiries into Salary History

California has long held the distinction of being the most employee-friendly state when it comes to employment law. In the last year, however, New York City has given the Golden State a run for its money.

Six months ago I wrote about New York City’s trendsetting “Freelance Worker” law, which enacted protections for employees in the “gig economy.” Beginning in November, in New York City it will also be an unlawful discriminatory practice for employers to inquire about the salary history of an applicant or to rely on that history in determining an employee’s pay.

The salary inquiry ban law is intended to address the concern that women are often offered less simply because women have historically been paid less. Hence, women are more likely to be disadvantaged by inquiries into their salary history.

While the new law provides an exception where an applicant voluntarily – and without prompting – discloses their salary history to the prospective employer, employers should exercise caution about engaging in any discussions about salary history in New York City. If there is later a dispute about who started the discussion, violators could face fines of up to $250,000.00. The law also allows employers to ask employees about their “expectations” about salary so long as no inquiries about salary history are made. Again, employers should exercise caution when asking an applicant about his or her salary expectations, lest the applicant interpret that as an inquiry into his or her salary history.

So, has California gotten soft on employers? Probably not. As I write this, the California legislature is holding hearings on its own salary inquiry ban law.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.