Legalities of Inquiring About a Job Applicant’s Salary History
Asking a job candidate about their salary history will soon become illegal in New York City by the end of 2017, with more jurisdictions likely to follow. On April 5, a bill that bans employers from inquiring about applicants’ salary history during the hiring process, or relying on their salary history to make a decision about salary and other benefits, was passed by an overwhelming majority of the New York City Council. The bill aims to close the wage gap for women and minorities. Mayor Bill de Blasio is expected to sign the bill into law, and it will then take effect 180 days later.
Unless the job applicant openly talks about their salary history, unprompted, New York City employers will be banned from inquiring about former compensation directly with the job applicant, their current or past employers, or from another current or prior employee of the applicant’s current or former employer. The law also bans employers from searching publicly for applicants’ salary history online.
New York City will be the first region to enact such a law, with other jurisdictions likely to follow suit. However, Philadelphia and Massachusetts have introduced similar bans. Just as the (not yet effective) Philadelphia law is facing legal issues from the Philadelphia Chamber of Commerce, New York City will likely face backlash from the Chamber of Commerce as well. As bans like this become more widespread, the argument against it is that it violates business’ First Amendment right to free speech. Supporters of this bill, such as City Council Public Advocate Letitia James, believe it will help close the gender-based wage gap that has garnered national attention. In a report she released in 2016, James found women in New York City earn about $5.8 billion less than men in wages every year. The report also found employers based compensation on what job applicants earned previously, so by eliminating employers’ inquiries about salary history, it gives women and minorities the ability to earn compensation based on their skills. In a statement ahead of the City Council vote in early April, James said asking applicants their past salaries “perpetuates a cycle of wage discrimination.”
Nonetheless, despite expected lawsuits against this bill, New York City seems to be trailblazing the new normal with regards to legalities of inquiring about a job applicant’s salary history. However, the loophole is that applicants can reveal salary history if they choose to.