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New York's Pay Equity Act

In January 2016, an amendment to New York Law Section 194 (“The Pay Equity Act”) went into effect. This amendment prohibits pay differentials based on gender in jobs requiring “equal skill, effort, and responsibility,” which are “performed under similar working conditions.”

The Pay Equity Act requires that employers show a “bona fide factor such as education, training or experience” that supports a difference in pay. In addition, the factor relied upon by the employer to support a differential in pay, must be job-related and consistent with business necessity. Even if the employer has met this burden, the Pay Equity Act allows the employee to prevail if he or she can prove three things: First, that the employer’s practice causes a disparate impact on the basis of gender. Second, that a viable alternative practice exists that would both remove the wage differential and serve the same business necessity, and third that the employer refused to adopt the alternative practice.

The Pay Equity Act gives employees the right to openly inquire about, disclose and discuss their wages. Employers may not forbid these conversations. Rather, the employer may only establish and distribute a written policy containing “reasonable workplace and workday limitations on the time, place and manner” for pay discussions. The law states that an example of a reasonable limitation would be a rule that an employee may not disclose a co-worker’s pay without the co-worker’s permission. The law contains some recognition that certain employees must still maintain confidentiality of pay information: an employer may prohibit an employee with access to other employees’ pay information as part of their job from disseminating that information to others who do not have the same access.