New York has long prohibited unequal pay for unequal work based on sex. However, come October 8, 2019, New York employers will also be prohibited from paying employees who are a member of one or more protected classes (no longer limited to sex) at a lesser rate than employees outside the protected class or classes in the same establishment for equal or substantially similar work. In other words, employees in any protected class will be permitted to proceed with pay equity claims.
The new law now requires equal pay among employees who perform “substantially similar” work, when the jobs being compared are “viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” This is lower standard than the previously used “equal work” threshold. This means that an employee will be able to establish a violation of the pay equity law even where his/her job is not identical to that of a comparator in a different protected class.
Notwithstanding these changes, employers in New York State will still be permitted to rely on a variety of permissible factors to justify wage differences. These factors include:
- A seniority system;
- A merit system;
- A system which measures earnings by quantity or quality of production; and
- Bona fide factors, other than protected status, such as education, training, or experience, provided that the factor(s) are job-related and consistent with business necessity.
In the light of the new law, employers should consider undertaking a pay equity analysis across all employees and protected categories. Since pay policies tend to impact multiple employees, claims likely will take the form of class actions and could expose employers to significant liability.