New York City, in an effort to combat the gender pay gap, on Tuesday became the first U.S. city to ban employers from asking job applicants about previous salaries.
Asking about past salaries can perpetuate unequal pay levels rather than allow applicants to seek pay based on their qualifications and earnings potential, city officials said.
Under the city's new law, the first of its kind to take effect in the country, employers who ask applicants about previous salaries or search for the information in public records will be subject to a fine of up to $250,000.
"By banning questions about salary history, we are putting a stop to an employment practice that perpetuates gender wage discrimination and hurts all New Yorkers," said Public Advocate Letitia James, who introduced the legislation, in a statement.
Women in the United States working full-time are paid 80 percent of what men are paid, according to the U.S. Census Bureau.
In New York state, women earn 87 cents for every dollar men earn, according to the Washington-based Institute for Women's Policy Research.
"Women and people of color deserve to be paid what they're worth, not held back by their current or previous salary," said Carmelyn Malalis, commissioner of the New York City Commission on Human Rights, also in a statement.
"Today's law will enable job seekers to negotiate a fair salary based on their skills and will help break the cycle of income inequality that has been so prevalent in the workforce for so long."
Other U.S. states and cities have passed similar legislation, but those laws have not yet taken effect, said a commission spokesman.
The main opponent to the law was the Partnership for New York City, a non-profit that represents the city's business leaders and private sector employers, according to James' office.
The Partnership was not immediately available for comment.
Reporting by Sebastien Malo, Editing by Ellen Wulfhorst