UPDATE TO BAN ON INQUIRING ABOUT JOB APPLICANT'S PRIOR SALAR HISTORY

Update to Ban on Inquiring About Job Applicant’s Prior Salary History

On May 4, 2017, Mayor DeBlasio signed into law a bill introduced by New York City’s Public Advocate Letitia James prohibiting employers from inquiring about a job applicant’s prior salary history during the recruitment process.  This bill, which will become effective in six months, is in stark contrast to a recent decision in the United States Court of Appeals for the Ninth Circuit, Rizo v. Yovino.[1]

In Rizo, the Ninth Circuit reaffirmed a previous decision and emphasized that an employer may rely on an employee’s prior salary history as an affirmative defense to claims under the federal Equal Pay Act.  The Ninth Circuit further ruled that the employer could rely on the employee’s prior salary history as a justification for paying a lower wage than the employee’s male colleagues “so long as it showed that its use of prior salary effectuated some business policy and that the employer used the factor reasonably in light of its stated purpose and its other practices.”[2]  As a result, the Ninth Circuit remanded the case back to the district court.

The impact of the Ninth Circuit’s ruling in Rizo on businesses remain to be seen because other circuit court of appeals, such as the Fifth, Tenth, and Eleventh Circuits have already rejected the notion that an employee’s prior salary history can be a valid defense to claims under the Equal Pay Act.  Furthermore, in New York City, companies will still be banned in six months from inquiring about a job applicant’s prior salary history.  Other states and localities have either passed legislation similar to New York City’s law, or have similar versions pending in their legislatures.

In addition, employers and companies should note that a federal version of the New York City law is currently pending in the United States Congress.  Introduced by Rep. Eleanor Holmes Norton (D-DC), H.R. 6030, also known as the Pay Equity for All Act of 2016 (“PEAA”), would amend provisions of the Fair Labor Standards Act in order to ban employers from asking an applicant’s prior salary history during the recruitment process.[3]  Therefore, companies should remain in close contact with their labor and employment attorneys to ensure that they are in compliance with any newly enacted employment laws.

[1] Rizo v. Yovino, No. 16-15372 (9th Cir. Apr. 27, 2017).

[2] Id. at *10.

[3] H.R. 6030, Pay Equity for All Act of 2016, available at https://www.congress.gov/bill/114th-congress/house-bill/6030/text (last visited May 5, 2017).

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