One of the determining factors of HR professionals and hiring managers is understanding the salary history of an applicant when they are being considered for a job. A typical request for many positions is to ask what an applicant has made in their most recent, or last couple of positions. For New Yorkers, the ability to request this is about to change.
New legislation has been signed by Mayor Bill de Blasio, and will take affect on October 31, 2017. This will undoubtedly affect employers that rely on prior salary history to set initial compensation.
The reasoning behind the new law is to circumvent pay disparities that exist for women and minorities. Similar laws have been passed in Massachusetts, Philadelphia and Puerto Rico and there are other cities and states considering similar legislation. There has also been legislation presented at the Federal level as well.
There are exceptions to this law.
- Voluntary Disclosure – If an applicant voluntarily discloses salary history, then the information can be used and the employer that is considering hiring them can verify the salary history at that point
- Compensation Expectations – Employers can ask about an applicants compensation expectations, and can also inform applicants of the salary range for the position being applied for
The ban also does not apply
- When salary disclosure is authorized under federal, state or local law;
- To current employees who are applying for an internal promotion or transfer;
- Public positions that are excluded when compensation is determined through collective bargaining
A common practice is to ask for salary history, so HR professionals will need to examine policies and reconsider the questions that are asked about salary history. This law will also create an atmosphere that requires a more uniform policy when it comes to setting compensation.
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