New York Governor Continues To Strengthen Equal Pay Protections

New York Governor Continues To Strengthen Equal Pay Protections

On January 9, 2017, New York Governor Andrew Cuomo announced his new “New York Promise” agenda, a sweeping package of reforms that the Governor promises will “advance principles of social justice, affirm New York’s progressive values, and a set a national standard for protections against all forms of discrimination.” As part of that agenda, the Governor signed two executive orders aimed at eliminating the state’s wage gap affecting women and racial and ethnic minorities. The executive orders preclude state employers from asking job applicants about prior salary information, and mandate that state contractors collect and report certain pay data.

Executive Order No. 161

Executive Order No. 161 prohibits “state entities” from asking job applicants about their prior compensation before a conditional offer of employment is made.[1]  If a state entity is already in possession of an applicant’s prior compensation, the entity cannot rely on that information when determining the new employee’s salary, unless required by law or a collective bargaining agreement.  “Compensation” means salary, wages, benefits, and any other forms of payment.  If an applicant volunteers his or her prior compensation information, then no violation of the Executive Order has occurred.  However, where an applicant refuses to provide this information, that refusal cannot be considered in making the decision about whether to hire that individual.

Women in New York earn 89% of what men earn.  The pay gap for women of color is the largest when compared to the pay of white men.  Those who have advocated for this prohibition have argued that using prior compensation when setting a new employee’s salary perpetuates discriminatory pay inequities in the state’s wage-setting system.

Executive Order No. 161 will be monitored by the Governor’s Office of Employee Relations.  The Office will also train human resources from state entities on how to comply with the Executive Order’s requirements.  Applicants who have been improperly asked for compensation in violation of the Executive Order may file a complaint with the Office.

Executive Order No. 162

Executive Order No. 162 directs that all state contracts, agreements and procurements issued and executed on or after June 1, 2017 must include a requirement that contractors and subcontractors agree to include detailed “workforce utilization reports.”  These reports must identify the gender, race, ethnicity, job title and salary of each employee of the contractor or subcontractor performing work on the state contract.  If the contractor or subcontractor is unable to identify the specific individuals working directly on the state contract, then the workforce utilization report must list the job title and salary of every employee in the contractor’s or subcontractor’s entire workforce.  For state contracts in excess of $25,000, this workforce utilization information must be reported on a quarterly basis.  For state contracts in excess of $100,000, this information must be reported on a monthly basis.

The stated rationale behind Executive Order No. 162 is to permit the state to collect salary information that will enable the New York State Department of Economic Development and other state agencies to identify inequities in salaries paid by the state’s contractors and subcontractors, and to ensure that workers are being provided equal opportunities to work on state contracts and are being paid similarly for performing the same work.

These Executive Orders have been praised by the community services organizations throughout the state.  For New York employers and business owners; however, the Executive Orders add to an already challenging regulatory environment.  It is more important than ever that employers stay up to date on this changing landscape, to ensure compliance and avoid liability.

Contributor:  Vida L. Thomas, Attorney at Law | Weintraub Tobin

[1] A “state entity” is defined as (a) all agencies and departments over which the Governor has executive authority; and (b) all public benefit corporations, public authorities, boards, and commissions, for which the Governor appoints the Chair, the Chief Executive, or the Majority of Board members, except for the Port Authority of New York and New Jersey.