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Effective 10/31 New Law Bars Employers in NYC from Asking about Salary History of Applicants

JW Michaels Compensation, Compliance / Risk Management, News

JW Michaels & Co. compliant with Local Law 67 of 2017 – New Law Barring Employers in NYC from asking about salary history of applicants.
JW Michaels & Co. navigates you through a critical new law prohibiting employers in NYC from inquiring about applicants’ compensation history.

As you may be aware, a New York City law broadly prohibiting inquiries into the compensation history of applicants for employment will go into effect on October 31, 2017. This ban includes inquiries from recruitment and staffing agencies acting as the agent for an employer.

The law will prohibit employers and recruiting firms (and their employees and representatives) from asking a job applicant about his or her “salary” history, and from relying upon the salary history to make placement, recruitment, and hiring decisions. Importantly, salary history is broadly defined and includes an applicant’s current or prior wages, salaries, bonuses, benefits, or other compensation.

Navigating New NYC Local Law 67 of 2017

This presents challenges for employers and recruiting firms not only to ensure that they are compliant with this new law, but also in devising new and creative strategies to gauge candidate performance and productivity, in order to make the most competitive compensation offers.

Employers in New York City will need to make critical changes to internal hiring processes and related employment documents, thoroughly auditing policies at all stages of the recruitment and selection process.

Rest assured, JW Michaels & Co. will operate in full compliance with this new law and can assist you with your hiring process to ensure that you are fully compliant as well.

JW Michaels & Co. Ensures Compliance With New Law

JW Michaels & Co. will no longer ask applicants and candidates for, or inquire about, compensation and benefits history; however, there are exceptions where we can provide information to employers with regards to compensation history:

  • If an applicant or candidate voluntarily and without prompting discloses compensation history to an employer or their representative, the law authorizes that employer or representative to consider the information in determining salary, benefits and other compensation for that applicant or candidate, and to verify that job-seekers compensation history. In such a case, after receiving the candidate’s consent, we can pass this information to clients, expressly indicating that the candidate voluntarily provided their compensation history, without prompting.
  • We will continue to discuss a candidate’s compensation expectations and a position’s targeted salary range. Similarly, we can ask a candidate to justify his or her desired compensation based on skills, experience, and training.
  • We can ask candidates about unvested equity or deferred compensation that a candidate may forfeit upon their resignation from their current employer.
  • We can ask candidates about any objective measure of the applicant’s productivity, such as originations, revenue, or other production data.
  • We can ask candidates about any competing or counteroffer.

Assessing Performance and Determining the Market for Compensation

Employers have often relied on a candidate’s prior salary history as a key factor in determining initial compensation offers. However, employers will no longer be able to rely on a candidate’s salary history, as that information will not be available. Employers will need to determine initial compensation offers on an assessment of a candidate’s skills, experience, and performance, and more importantly, the “market” compensation range for hiring requirements. That is where JW Michaels & Co. can add tremendous value.

JW Michaels & Co. is continually developing strategies to gauge a candidate’s skills, productivity, and performance, in addition to maintaining rigid standards in all of the above. We can provide you with qualitative and quantitative measures of a candidate’s performance. Our teams are skilled in gauging candidate productivity and reviewing past performance measures.

JW Michaels & Co.’s Partners and Senior Recruiters each have 10-30+ years of industry experience. We closely track compensation trends and have in-depth market knowledge into the marketplace. Given our market intelligence, we can provide detailed and accurate compensation data about a wide range of industries, functions, and seniority levels.

Should you have any questions or concerns, feel free to reach out to Justin M. Mandel directly by email at jmandel@jwmichaels.com or call (646) 346-2457.

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