New York State Labor Law Amendments Affecting Proof in Pay Discrimination Cases and Employer Policies Concerning Wage Disclosure: Amendments Alter Burden of Proof in Gender-Based Pay Cases and Bar Employer Prohibitions of Employee Wage Discussions

Sullivan & Cromwell LLP - March 10, 2016

The New York State Labor Law, in Section 194, prohibits differential pay on the basis of sex.  Effective January 19, 2016, new amendments have added specific elements to the burden of proof in claims under Section 194, requiring employers with pay differentials to demonstrate a “bona fide” basis for a differential, “such as education, training, or experience,” which must be job-related and consistent with business necessity.  The amendments allow employees to challenge the employer’s basis for a pay differential by showing that the employer’s practice has a disparate impact on the basis of sex and that an alternative practice would serve the same business purpose and not create a pay differential.  In addition, the amendments forbid employers from prohibiting an employee from “inquiring about, discussing, or disclosing the wages of such employee or another employee.”  An employer may, however, in a written policy provided to all employees, establish reasonable limitations on employees’ communications concerning their wages, including prohibiting an employee from discussing a co-worker’s wages without prior permission.  Finally, the amendments increase the liquidated damages available to successful plaintiffs from 100% to 300% of the amount of wages found to be due for a willful violation of the law.