New York Governor Andrew Cuomo signed several bills into law in late October 2015 that affect employers, including amendments to the state’s equal pay law. Senate Bill 1, the Achieve Pay Equity (APE) law, amends the New York Labor Law’s provisions on pay disparities based on sex. New York business owners—both those with employees and those who might have employees some day—should be aware of how these new laws could affect them.
Federal and state laws prohibit employers from paying different wages to employees based on sex, if the requirements, qualifications, and working conditions of the jobs are otherwise the same. Both laws provide defenses for employers against claims of unlawful wage disparity based on sex if they can demonstrate that the difference in wage is actually based on a system of seniority, merit, quality of work, quantity of production, or “any other factor other than sex.” 29 U.S.C. § 206(d)(1), N.Y. Lab. L. § 194. The same legal standard generally applies to claims brought under either law. Moccio v. Cornell University, 889 F.Supp.2d 539, 570 (S.D.N.Y. 2012). The APE expands employees’ rights beyond the protections offered by federal law.
Some employers prohibit employees from inquiring about or discussing co-workers’ wages or salaries. The current version of New York’s equal pay law is silent on this type of policy, although federal law already prevents some New York employers from prohibiting employees from discussing wages with one another. Section 7 of the National Labor Relations Act (NLRA), 29 U.S.C. § 157, for example, protects employees’ rights to form unions for the purposes of collective bargaining. Discussion of wages is considered essential to such activity. Federal contractors are prohibited from enacting policies against discussing wages under Executive Order 13665.
The APE makes several key changes to the state equal pay law. It expressly states that an employer may not “prohibit an employee from inquiring about, discussing, or disclosing the wages of such employee or another employee,” but it allows employers to enact policies placing “reasonable workplace and workday limitations” on such discussions. N.Y. Lab. L. § 194(4), as amended by S.B. 1 § 1 (N.Y. 2015-16). It also states that none of its provisions regarding wage information transparency compel an employee to disclose their wages.
The new law also changes the “other factor than sex” defense to a “bona fide factor other than sex.” N.Y. Lab. L. § 194(1)(d), as amended by S.B. 1 § 1. “Bona fide” factors include “education, training, or experience.” Id. An employee may still be able to state a claim if they can show that “a particular employment practice…causes a disparate impact on the basis of sex,” that the employer could use a different practice to achieve the same purpose, and that the employer has declined to adopt an alternative practice. Id.
Finally, the APE increases the amount of damages available in certain wage claims. Currently, liquidated damages are limited to 100 percent of the total amount of underpaid wages owed to a plaintiff. N.Y. Lab. L. § 198(1-a). The APE allows liquidated damages of up to 300 percent if the plaintiff proves that the employer acted willfully in violating § 194.
Business law attorney Samuel C. Berger offers fixed-fee legal-service packages to New York and New Jersey businesses covering a wide range of legal issues, including business formation, contracts, other operational matters, and the winding down and dissolution of a business. Contact us online, at (201) 587-1500, or at (212) 380-8117 today to schedule a confidential consultation with a knowledgeable business law advocate.
More Blog Posts:
In Claim for Breach of Employee’s Duty of Loyalty, New Jersey Supreme Court Allows Disgorgement of Salary Even Without Evidence of Economic Loss, New York & New Jersey Business Lawyer Blog, November 19, 2015
Federal Government Holding More than $7 Million in Unclaimed Back Pay Collected from New Jersey Businesses, New York & New Jersey Business Lawyer Blog, September 3, 2015
Employment Law for New Jersey Small Business Owners, New York & New Jersey Business Lawyer Blog, June 18, 2015
Photo credit: U.S. Bureau of Labor Statistics, Division of Information and Marketing Services (http://www.bls.gov/opub/ted/2006/oct/wk1/art02.htm) [Public domain], via Wikimedia Commons.