On July 10, 2019, Governor Andrew Cuomo signed the Fair Pay Act which prohibits wage differentials based on protected class status. Specifically, the new law expands current law that protects against gender-based pay inequity by requiring equal pay for “substantially similar work” and prohibiting pay differentials based on a person’s membership in a host of protected class or classes, including age, race, sexual orientation, disability, and domestic violence victim status.
Employers may pay differential wages when they are based on the following:
- Under a seniority system;
- A merit system;
- A system that measures the quality or quantity of production; or
- Based upon a job related bona fide factor such as education, training, or experience.
An employee may defeat one of these exceptions by demonstrating the following:
- The employment practice used results in a disparate impact upon a protected class;
- There is an alternate employment practice that would serve the same business interest and will not result in a disparate impact; and
- The employer has refused to adopt the alternative practice.
The Act imposes a civil penalty of $500 for each violation. The law becomes effective in October 2019.