Expanded Pay Equity Law in NYS takes effect today
Today, a new law will go into effect that will lead to changes in the workplace—both for current employees and those going through the application and interview process with prospective employers.
We recently spoke with Katherine Wood, Esq. an attorney at Hurwitz & Fine, PC who focuses her practice on employment law. She gave us a thorough rundown of the changes this law will enact, and how employers and employees can prepare for them.
The pay equity law will apply to all private employers in the state and is intended to be a positive step forward for women in the workplace. This law will also have positive impacts for those employees who are members of protected classes, as it will prohibit employers from pay discrimination based on an individual’s disability, familial status, race, age, gender identity or expression.
According to Wood, the new pay equity law also changes the standard for what constitutes discrimination. Previously, New York State’s law was very similar to The Equal Pay Act of 1963, a federal law which prohibits pay discrimination based on sex. Essentially, employers were expected to provide equal pay for equal work, meaning they were prohibited from paying a female employee less than a male employee for performing the same job. This standard still applies, but in addition to the old standard, the new law will also require an employer to pay equal pay for “substantially similar work.”
“Previously it would have been illegal for an employer to pay a woman less than a man when the two were performing equal work if the differential could not be explained by differences in seniority, merit, or quantity and quality of work, and this has not changed—this behavior is still discriminatory,” Wood said. “However, now it would also be illegal, for example, for an employer to pay an individual who has a disability less than an individual who does not have a disability when the two individuals were performing substantially similar work. However, the new pay equity law does retain the permitted rationales for pay differentials between employees, such as: seniority, merit, and quantity and quality of work.”
Wood notes that this law should prompt employers to do some very thorough analysis of their employees’ pay rates and job responsibilities, in order to ensure compliance with the new standards.
“While the equal pay for equal work standard is relatively easy to understand and apply, the new substantially similar work standard adds a wrinkle,” Wood said. “Employees may have different job titles, but if the work they are actually performing is substantially similar, the employer must consider why the employees’ wages are different and determine whether the rationale for the differential falls within the permitted rationales.”
A second new employment law, a salary history law, will go into effect on January 6, 2020 and will apply to all employers in the state, including public employers. This law prohibits an employer from asking about a prospective hire’s salary history. Again, this law will be a great support for women in the workplace.
“The idea behind this law is that if women start with lower initial salaries than men, the lower salary will follow women throughout their careers when prospective employers inquire about much money the woman currently makes,” Wood said. “Under the new salary history law, employers are prohibited from asking an applicant about his/her salary history when being interviewed or as part of a promotion. Prospective employers are also prohibited from seeking salary information from the individual’s former or current employer. If a prospective employee voluntarily provides salary history information without being prompted by the prospective employer, the employer is still prohibited from relying on this information to determine whether to make a job offer or when setting the employee’s salary.”
In preparation for the new salary history law, Wood recommends that all employers initiate a thorough review of their application paperwork and any interviewing materials to ensure that they do not include questions relating to salary history. They will also be responsible for determining a fair salary for an employee without knowing how much they made previously at a similar job, which could prove challenging at first.
This law will change the dynamic for applicants as well, as they will now have to decide whether they want to volunteer that salary information to a prospective employer. Wood anticipates that this law will cause a slight shift in power from the employer to the applicant during the pre-employment process.
“The employer will enter the interview process without the knowledge of what salary the candidate is seeking, which gives the jobseeker a slight upper hand in negotiations, as the employer cannot base its offer off prior salary information,” Wood said. “Because the employer lacks prior salary information, the potential employee may need to negotiate with the employer in order to reach a salary acceptable to him/her.”
Wood also pointed out that the new law does not prevent employers from asking an employee how much they would like to make, which does provide the employer with a baseline to begin negotiations. This could lead to jobseekers receiving lower initial salary offers as employers try to navigate the new process.
“Employers now have no way of knowing whether their salary offer is in line with, or better than, what the prospective employee currently makes in his/her current position,” Wood said. “Without this information, employers may err on the side of keeping the initial salary offer low with the expectation that the employee will negotiate to a salary comparable or better to his/her prior salaries. However, this may also lead to jobseeker frustration, particularly if the jobseeker is unaware that the employer is legally prohibited from asking about prior salary and/or does not anticipate negotiating his/her salary.”
Wood advises all employers to familiarize themselves with the new laws and re-examine their hiring processes to ensure compliance with the new standards. She suggests that prospective employees contact an experienced labor and employment law attorney if they believe they have been discriminated against by their employer or if a prospective employer violated the salary history law during their interview process. She also advises employers to reach out if they have questions about how to comply with the new standards.