More litigation may be side effect of New York's new equal pay law

A new state law that broadens the definition of “equal pay for equal work” may lead to increased litigation for employers over wage issues, labor attorneys said.

The measure, which broadens the language to include equal pay for “substantially similar” work, was passed along with legislation that prohibits employers from asking for job applicants’ salary histories. The first bill is expected to go into effect in October and the second in January.

Gov. Andrew M. Cuomo signed the two bills into law in Manhattan this month before the ticker-tape parade held to celebrate the U.S. Women’s National Soccer Team’s fourth World Cup win. The team has filed a gender discrimination lawsuit against the U.S. Soccer Federation, claiming its members deserve to be paid what members of the American men’s soccer team are paid.

“There is no rationale why women should not get paid what men get paid,” Cuomo said in a statement. “By signing this legislation, we are not only doing the right thing, we are also doing the moral thing, and equal pay for equal work is now the law in the State of New York.”

Labor attorneys said the salary history ban serves to end the perpetuation of lower wages throughout an individual’s career. Observers said that if a woman is offered a lower salary than a male counterpart early on, that differential can continue throughout her career, especially if subsequent employers use past salary information for job offers.

Both Suffolk County and New York City have instituted bans on past salary inquiries in recent years.

“The purpose really is to stop perpetuating the gap that frequently occurs, particularly for minorities and women,” said employment lawyer Kimberly B. Malerba, partner at Ruskin Moscou Faltischek in Uniondale. The limitation on what employers can ask will likely impact how businesses approach salary offers.

“For companies, what that really means is that they have to value a position ahead of time, so they know a certain salary range is what they are willing to pay for this position, not dependent on what someone was previously paid,” she said.

On average, women’s annual salaries are 80 percent of men’s earnings, according to the American Association of University Women.

In Nassau County, the median income for women working full time was $61,056 in 2017 compared with $72,943 for men, according to the most recent available estimates from the Census Bureau. In Suffolk, the median income for women working full time was $51,918 in 2017, compared with $68,658 for men.

While the state’s new salary history law offers a clear ban on asking applicants for previous pay levels, the second equal pay law leaves room for interpretation, said Richard Kass, labor and employment attorney with Bond, Schoeneck & King in Garden City.

The bill requires “equal pay for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under substantially similar working conditions.” The previous equal pay law focused on wage protections for women, but the new law extends the protections to those discriminated against on the basis of race, age, sexual orientation and other protected classifications.

Because the standard has been broadened from “equal pay for equal work” to “substantially similar work,” Kass said it’s very likely that employers will face an increase in litigation as lawyers grapple with the interpretation of the statute’s language.

“Skill, effort, responsibility: Whenever you have new vague language in a statute like this, it leads to litigation,” he said. Employers are “going to have to look very carefully at all their different job titles.”

“There are exceptions that help employers defend themselves,” Kass said. “But employers don’t want to be in court defending themselves.”

Malerba, who pointed to an increase in sexual harassment cases brought forward in the wake of the #MeToo movement, said public awareness of legal rights can often lead to increases in litigation and she expects employees might be more willing to take legal action in light of the new legislation.

“Although a lot of the protections do overlap with already existing law, because of the publicity and public awareness of this law, it may result in employees bringing these issues up to employers’ attention and also to litigation,” Malerba said. “There’s a better chance that employees will bring this to light.”

Julia Bear, an associate professor at Stony Brook University’s College of Business who researches gender issues in the workplace, said that while the new salary history legislation “could have a powerful impact” on bridging the pay gap between men and women, other complicating factors remain.

“There’s so much research showing that women are less likely to negotiate for higher salaries compared to men,” said Bear. “If men are more likely to negotiate … you still may have a situation where [men and women] get the same offer, but a man is likely to ask for a little bit more.”

Larger societal issues, such as assumptions over who may be the breadwinner in a household, influence employers’ views on what an appropriate salary offer would be, she said.

According to research Bear conducted in 2016, individuals, on average, assumed that male job candidates were primary breadwinners and were more likely to be offered higher salaries than women. When it was made clear that women were the primary income earners in their household, however, outcomes changed, Bear said.

“When we gave explicit information that these people were the primary breadwinner, all that discrimination went away,” she said.