Conducting Salary Discussions in New York City after November 1, 2017

Conducting Salary Discussions in New York City after November 1, 2017

By:  Marc Jacobson, Esq.

Don’t ask for an applicant’s salary history, whether for you or your client, when interviewing that applicant for employment in New York City.

You were asked to represent a film production to take place in NYC. As part of that engagement, you were asked to negotiate agreements for the director, and cast to appear in the picture, and for the department heads—make up, sound, transportation, costumes, and others.

Calls start coming in and you’re ready to get to work.  An actor’s agent confirms her client wants to play the female lead.  In turn, you say the role requires eight consecutive weeks of shooting preceded by one week of rehearsal.  You want to minimize costs for the production, and so, you say, “what’s her quote?” meaning, what was her fee per week on her last film?

Or, you’re working on any other production in New York City—a TV show, a play, a music video– and you need to negotiate the agreement for the the Costume Designer, or the Set Designer.  You ask each of their agents for a quote.

Under a new law, now in effect in New York City, each such question can subject the production to a fine of $125,000.

Section 8-107 of the administrative code of the city of New York, was recently amended to add a new subdivision 25.  That subdivision prohibits employers from inquiring about or relying on a prospective employee’s salary history when setting the new salary.  When enacting the law, the council said: When employers rely on salary histories to determine compensation, they perpetuate the gender wage gap. Adopting measures like this bill can reduce the likelihood that women will be prejudiced by prior salary levels and help break the cycle of gender pay inequity.”

The code states it is unlawful for an “employer, employment agency, or employee or agent thereof:

  1. To inquire about the salary history of an applicant for employment; or
  2. To rely on the salary history of an applicant in determining the salary, benefits or other compensation for such applicant during the hiring process, including the negotiation of a contract.”

There is a definition of “inquire” in the code as well:

“ “to inquire” means to communicate any question or statement to an applicant, an applicant’s current or prior employer, or a current or former employee or agent of the applicant’s current or prior employer, in writing or otherwise, for the purpose of obtaining an applicant’s salary history, or to conduct a search of publicly available records or reports for the purpose of obtaining an applicant’s salary history, but does not include informing the applicant in writing or otherwise about the position’s proposed or anticipated salary or salary range.”

The term “salary history” is also defined: “For purposes of this subdivision, “salary history” includes the applicant’s current or prior wage, benefits or other compensation. “Salary history” does not include any objective measure of the applicant’s productivity such as revenue, sales, or other production reports.”

The employer, or its representatives “may, without inquiring about salary history, engage in discussion with the applicant about their expectations with respect to salary benefits and other compensation…”

Going further, and making these interviews/negotiations even more awkward, “where an applicant voluntarily and without prompting discloses salary history to the [employer or its representatives] the employer [or its representatives] may consider salary history in determining salary benefits and other compensation for such applicant, and may verify such applicant’s salary history.”

If you’re in the midst of that discussion, you cannot “prompt” the applicant to tell you their salary history. Further, if you happen to learn it, from another source, you cannot “rely” on it in determining the salary of the applicant.

But if the applicant voluntarily reveals that information to you, without prompting, you can rely on the information, and make whatever decision you want.

Without a tape recording of every conversation between the employer or the employer’s representatives, and the applicant or the applicant’s representatives, it seems like whatever happens in these calls will be difficult to prove.

While the goal is admirable, it does seem to be legislate an awkward conversation with each potential applicant, because the employer cannot ask, or prompt the applicant to reveal this information.

Under section 8-126 of the NYC Administrative Code, if the Human Rights Commission, which has authority to enforce the new section, finds that a person “has engaged in an unlawful discriminatory practice, the commission may, to vindicate the public interest, impose a civil penalty” of not more than $125,000.  This penalty is in addition to the complainant’s right to bring a private action under the code.  Criminal misdemeanor penalties are available for “any person who shall willfully resist, prevent, impede or interfere with the commission or any of its members or representatives in the performance of any duty” under the code.

Whether acting for yourself or your clients, in New York City it is a violation of the administrative code to inquire about salary history, or to rely on salary history, to determine the salary of any employee.

Link to the NYC Charter:  https://www1.nyc.gov/site/cchr/law/chapter-1.page#8-107.1

The code, as enacted, with summary of the law:  http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=2813507&GUID=938399E5-6608-42F5-9C83-9D2665D9496F

Marc Jacobson, Esq. is the Founding Chairman of the NYS Bar Association Section on Entertainment Arts & Sports Law. He speaks regularly at bar association and other events about issues related to his practice. He is licensed to practice law in New York, California, and Florida. He can be reached at marc@marcjacobson.com or +1-212-245-8955.  www.marcjacobson.com

Marc Jacobson
marc@marcjacobson.com