ALBANY – Governor Andrew Cuomo announced that starting Wednesday, new reforms go into effect prohibiting businesses from charging a “pink tax,” otherwise known as the practice of charging different prices for “substantially similar” consumer goods or services that are marketed to different genders.
In April the Governor signed the FY 2021 New York State Budget which included the Governor’s proposal to ban the “Pink Tax.” The new measure requires certain service providers to provide price lists for standard services upon request and notifies them that gender-based price discrimination is prohibited under State law. Businesses that violate the law will be subject to civil penalties.
According to the governor’s office, since the early 1990s, numerous studies have demonstrated the stark disparities in the cost of substantially similar goods and services based on whether they were marketed for men or women. Across the board, the studies found that women paid more for the female version of the same product offered to men. The economic impact on women to pay more for the same product has a greater overall reach than those immediate purchases. Starting today, September 30, 2020, the gross compound effect of the gender-based price disparities comes to an end in New York State.
The new law mandates that any individual or entity, including retailers, suppliers, manufacturers or distributors, are prohibited from charging a price for two “substantially similar” goods or services, if the goods or services are priced differently based on the gender for whom the goods or services are marketed.
“Substantially similar goods” is defined as two goods that exhibit little difference in the materials used in production, intended use, functional design and features, and brand. “Goods” include any consumer product used, bought, or rendered primarily for personal, family or household purposes. For example, the same children’s swimming pool product brand and dimensions offered in pink at $89.99 and blue at $69.99 would constitute a violation of law.
“Substantially similar services” is defined as two services that exhibit little difference in the amount of time delivering, difficulty, and cost in providing the service. “Services” include any consumer services used, bought or rendered primarily for personal, family or household purposes. For example, dry cleaning a woman’s suit jacket for $12 and a man’s suit jacket for $8, would constitute a violation of law.
Anyone selling products or providing services can avoid running afoul of the new law by ensuring that any price difference is based upon the following:
- The amount of time it took to manufacture such goods or provide such services
- The difficulty in manufacturing such goods or offering such services
- The cost incurred in manufacturing such goods or offering such services
- The labor used in manufacturing such goods or providing such services
- The materials used in manufacturing such goods or providing such services
- Any other gender-neutral reason for having increased the cost of such goods or services
Violations of the law are subject to the court ordered enjoinment of such sales, restitution to consumers, up to a $250 fine for the first violation, and up to $500 fine for any subsequent violations.