New York’s Stronger Equal Pay Law

In our last post, we briefly overviewed the employment-related bills that make up the recently enacted New York Women’s Equality Act. In these next couple of posts we will expand upon some of those components.

First up is the strengthening of the New York State Equal Pay Law.  (This is different from the federal Equal Pay Act, which is similar, but not identical to, the state law that was just amended.)

The prior version of the NY Equal Pay Act allowed an employer to pay a man more than a similarly situated woman if the difference was based on a factor “other than sex”. Under the new law, a lawful pay differential can only be based upon a bona fide factor such as training, education or experience. This change will make it more difficult for employers to justify gender-based pay discrimination.

The new law also provides that employers cannot prevent employees from sharing information about their wages. This will allow employees to find out if they are being paid less than their colleagues, an important first step in pursuing many types of discrimination litigation, not just actions under the Equal Pay Act.

Finally the amendments to the NY Equal Pay Act increase the damages that can be awarded to successful equal pay litigants to up to 300% of the wage differential. Here’s how that works: say Jane Doe works at a company for a year, making $11.85 an hour for the same job that pays John Smith $15 an hour. If they both work 40 hours per week, then Jane Doe only makes $24,648 in a year, while John Smith makes $31,200, a difference of $6,552. Under the new law, if Jane Doe sues and wins, her employer may have to pay three times that amount, or almost $20,000 in damages. The new penalty should provide a serious disincentive for employers to underpay even low-wage earning women.