Companies with NY employees need to be aware of two recent legal developments which impose new liability under discrimination rules. There are already an array of different federal, state and local statutes which protect employees (and potential employees) from discrimination on many grounds, including sex, race, disability, and even felony conviction status. These rules impact not only New York based companies, but also out-of-state businesses that require New York employers to follow their employment practices.
Prohibition on inquiring about salary history
On May 4, 2017, New York City passed a law prohibiting employers from inquiring about an applicant’s salary history. The goal of the law is, in part, to combat gender-based wage discrimination. It recognizes that if women were previously paid less in part because of gender discrimination, allowing subsequent employers to request salary history would continue to perpetuate the prior discrimination (whether consciously or unconsciously).
These laws are a growing trend, with legislation recently signed in Philadelphia and Massachusetts. It is also likely that New York State will follow with its own law which would apply to all businesses in the state.
Penalties for violations include potentially significant fines (in excess of $100,000) or required remedial measures, such as compensatory damages and/or additional reporting requirements.
The NYC law is effective November 1, 2017.
Liability for aiding and abetting employment discrimination
New York Human Rights Law 296 prohibits discrimination against convicted felons in hiring decisions except in certain circumstances. Limited exceptions to the law include:
• Where the applicant’s criminal offense relates directly to the employment sought, or
• Where employment would create an unreasonable risk to the property or safety and welfare of the general public.
The law also prohibits aiding and abetting the violation of the law.
The new development in this area is the decision in Griffin v. Allied Van Lines. In the case, the New York Court of Appeals, responding to certified questions from the United States Court of Appeals for the Second Circuit, held that an out-of-state party, which is not a New York employer, can be found guilty of aiding and abetting a Human Rights Law violation when it requires a New York employer who provides it with workers to improperly consider felony conviction.
In this case, Allied Van Lines and its parent company required a New York employer from whom it contracted for labor to comply with its hiring program, which included criminal background checks. The Court held that this action constitutes aiding and abetting, notwithstanding the fact that Allied was not in New York State. The Court limited its ruling to situations where the conduct of the out-of-state employer has an impact on individuals seeking employment in New York.
The decision reaffirms that the New York statute can apply to an out-of-state entity if there is an impact shown within New York.
Takeaways for employers
To ensure compliance with the new developments, employers should take the following steps:
• Review employment applications and hiring and interview practices and make appropriate changes to ensure compliance
• Properly train employees involved in conducting interviews or making hiring-related decisions
• For out-of-state companies, consider local labor laws in other jurisdictions where they operate. In particular, companies who may have subcontractors or franchisees in New York should make sure their hiring protocols do not run afoul of New York laws as it could be considered aiding and abetting.
• Contact qualified legal counsel to review and advise on best employment practices.
Business owners must take care to stay up-to-date on the increasing number of employment laws governing the workplace.
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This post does not constitute legal advice or establish an attorney-client relationship.