In October of 2015, the New York Legislature passed the Achieve Pay Equity Act (the Act) as part of the Women's Equality Agenda. 2015 N.Y. Lab. Law § 194 (McKinney), which can be found at http://legislation.nysenate.gov/pdf/bills/2015/S1. The Act, which went into effect on January 19, 2016, amends New York’s existing Equal Pay Act by expanding employers' equal pay obligations and tightening the available defenses.
First, the Act expanded the available damages by permitting an award of liquidated damages for willful violations of the Equal Pay Act of up to 300 percent of the wages determined to be due.
Second, the Act changed the way employees can prove and employers can defend claims of unequal pay:
- Under New York’s old Equal Pay Act, an employer could defend against claims of a gender-based pay gap by showing the difference in pay was based on "any factor other than sex." This language was removed by the Act.
- Instead, the Act now requires employers to show that the difference in pay is based on a "bona fide factor such as education, training or experience." Additionally, the factor relied upon must be job-related and consistent with business necessity.
- Even if the employer meets this hurdle, the employee will prevail under the Act if he or she can demonstrate three things: (1) that the employer’s practice causes a disparate impact on the basis of sex; (2) that an alternative practice exists that would remove the wage differential while serving the same business purpose; and (3) that the employer refused to adopt this alternative practice.
Third, the Act broadly defines what is considered "the same establishment" for purposes of determining whether an employee of the opposite sex is paid less than his or her counterpart in the same establishment:
- Under New York's old Equal Pay Act, the law compared the wage paid to the complaining party with the wage paid to another employee in "the same establishment" to assess whether the complainant was paid less than other employees who worked for the same employer based on the complainant's gender.
- However, under the Act, employees are considered to work in "the same establishment" if they work "for the same employer at workplaces located in the same geographical region, no larger than a county," thereby considerably expanding what is deemed to be a part of "the same establishment."
Fourth, under the Act, employers may not prohibit employees from inquiring, discussing or disclosing wages. While the Act provides that employers may provide new written policies to establish reasonable workplace and workday limitations on the time, place and manner for such inquires and discussions, the limitations must comply with all other state and federal laws.
Fifth, the Act states that it does not limit the rights of an employee provided under any other provision of law or collective bargaining agreements.
In sum, the Act will make it easier for employees to establish claims for unequal pay. Therefore, employers should consider taking several steps to comply with the Act, such as the following:
- Conduct an assessment of any pay differentials and determine what factors account for any such differences in pay.
- Review pay practices to ensure that pay decisions are not based on gender and adopt any necessary alternative practices.
- Eliminate policies that prevent workers from discussing compensation and enact new policies to ensure that employees are not discriminated against for discussing or inquiring about compensation.
- Update equal opportunity policies and clauses in any applicable contracts to prohibit discrimination against employees and applicants who discuss compensation.
- Train decision-makers regarding nondiscriminatory pay practices and policies prohibiting discrimination against individuals who discuss or inquire about compensation.