More States Seek to Close Wage Gap with Salary Question Bans

Inquiry restrictions vary by state and municipality

By Melissa A. Silver, J.D., XpertHR Legal Editor May 24, 2018
More States Seek to Close Wage Gap with Salary Question Bans

From Hollywood to the White House, the issue of the gender wage gap is a hot topic. Although the Equal Pay Act has been around for decades, pay disparities persist. As a result, there is a renewed focus on equal pay on the state and local level, which has led to new laws and regulations promoting fair pay. 

One way in which some states and municipalities are seeking to close the wage gap is by enacting laws banning or restricting salary history questions during the hiring process. Connecticut became the latest state to ban such inquiries when Gov. Dannel Malloy signed a pay equity law on May 22.

According to the National Partnership for Women & Families, women in Oregon earn just 81 cents for every dollar paid to men. Oregon is another state that has passed a salary-history inquiry ban to create a path toward closing the gap between the wages of women and men.

In those locations, asking, "What's your current salary?" has been part and parcel of the hiring process for as long as employers have been hiring employees but may no longer be permitted.

The reasoning behind these laws is that if an employer relies on an applicant's salary history to determine compensation, it perpetuates the gender wage gap. These laws therefore restrict an employer's ability to seek salary history information in an effort to eliminate the differences between what men and women are paid for either equal or comparable work. A job applicant's skills and qualifications should determine salary and not compensation history.

With the new changes in legislation banning salary history questions, employers need to be aware of the laws in the states and municipalities where their employees are located.

At least 12 jurisdictions have passed laws banning employers from asking job applicants about their past or current salary, and this trend will likely continue.

States with salary-history inquiry bans thus far include:

  • California.
  • Connecticut (effective Jan. 1, 2019).
  • Delaware.
  • Massachusetts (effective July 1).
  • Oregon.
  • Vermont (effective July 1).

In addition, Albany County, N.Y.; New York City; Westchester County, N.Y. (effective July 9); Puerto Rico; and San Francisco (effective July 1) have enacted salary inquiry laws. Philadelphia's ban was slated to take effect in 2017, but a federal judge halted part of the ordinance, finding that a law prohibiting employers from asking candidates to reveal their past salaries violates the First Amendment's free-speech clause. However, the judge said that the city is allowed to stop employers from using past salary information to set pay rates.

Some jurisdictions, such as New Jersey, New York and New Orleans, prohibit certain public employers from asking about salary history.

While all of these laws aim to eliminate the pay gap between men and women for performing the same or comparable work, each law places different restrictions on employers. For example, in Delaware, an employer may seek an applicant's salary information for the sole purpose of confirming it, only after it extends a job offer with the terms of compensation that the applicant has accepted. Some laws, such as in San Francisco, permit an employer to consider or verify an applicant's salary history if he or she voluntarily discloses it without prompting or provides written authorization.

Although there are variations among these salary-history inquiry laws, in most cases, an employer may ask a job applicant about his or her salary expectations. According to Cheryl Pinarchick, an attorney with Fisher Phillips in Boston, asking salary expectations is within bounds. "It's a good way to figure out if you should continue a conversation with an applicant. Are they in the right ballpark for what the job is going to pay?"

Further, objective measures of productivity, such as sales history or billable hours, could be a legal justification to pay people differently. In fact, the New York City law excludes an objective measure of productivity, such as revenue sales or other production reports from the definition of salary history.

However, employers should use caution with respect to searching public records for a job applicant's salary history information. Whether it is allowed, Pinarchick said, "all depends on what state you're in and what state they're in, or what city you're in and what city they're in."

Regardless, Pinarchick recommends that employers avoid doing so. Even if an employer is not prohibited from looking it up, an employer may or may not be able to use that information under the broader pay equity law. An applicant could come back and claim the employer did not hire him or her or that the applicant is paid less because of that salary information, which may be illegal under the law.

It seems likely that laws banning salary history inquiries will continue to gain traction across the country. Employers should therefore ensure compliance with these laws through smart planning by training managers, supervisors and HR personnel involved in the hiring process, particularly those individuals conducting interviews, and update job applications and other documents that seek this information. With more salary-history inquiry bans on the horizon, employers should also be vigilant in tracking these developments to ensure compliance.

Melissa A. Silver, J.D., is a legal editor with XpertHR.

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