On July 10, 2019, the Governor of New York State signed into law a bill extending New York’s pay equity protections to pay differentials based not only on gender, but also those caused by discrimination on the basis of age, race, sexual orientation, disability, and domestic violence victim status.  The bill lowers the burden of proof by eliminating the necessity of proving that claimant and the comparator performed truly “equal” work.  In short, the bill makes it easier for potential plaintiffs to establish liability by allowing them to compare themselves to workers who do not necessarily perform the same job as they do – it broadens their potential pool of comparators.

Pay differentials still are permitted when they are based on a bona-fide seniority system, a methodology measuring earnings by quantity or quality, or a bona fide reason other than the individual’s membership in a protected class. The pay differential must be job-related and due to business necessity, such as geography, education, or experience. The law allows a successful plaintiff to recover treble damages.  Additionally, the law bans employers from inquiring into a job applicant’s prior salary history.

The law takes effect on October 8, 2019. Insureds should review job applications to confirm compliance with the new law and should consider undertaking a review/audit of pay practices.  A pay equity analysis now should be run across all employees and protected categories, not just comparisons of male and female employees.  Since employers’ pay policies tend to impact multiple employees, claims likely will take the form of class actions and could expose insureds to significant liability.