Delaware Enacts Pay History Ban

Delaware's passage of H.B. 1 adds to a growing wave of laws banning salary history inquiries. Similar restrictions have been enacted recently in Massachusetts, New York City, Philadelphia, and, most recently, Oregon.

On June 14, Delaware Gov. John Carney signed into law H.B. 1, banning employers from asking job applicants about their salary history. The law is set to take effect in December 2017, six months from its passage.

Delaware is not the first state to pass a salary history ban law, but it is set to become the first state to enact such changes into law.

Prohibited Activities

H.B. 1 makes it unlawful for a Delaware employer to seek the pay history of applicants before making employment offers. The employer is prohibited from asking for this information from both the job applicant and his or her current or former employer.

In addition, employers are no longer permitted to engage in salary-based screening of job applicants, where prior compensation must satisfy certain minimum or maximum criteria.

Notably, employers are not prohibited from discussing and negotiating salary expectations, so long as the employer avoids asking for the applicant's compensation history.

After an employment offer has been made and accepted and compensation terms have been spelled out, H.B. 1 allows for the confirmation of salary history information.

Part of a Growing Trend

Delaware's passage of H.B. 1 adds to a growing wave of laws banning salary history inquiries. Similar restrictions have been enacted recently in Massachusetts, New York City, Philadelphia, and, most recently, Oregon.

Massachusetts was the first state to pass such a measure in August 2016. However, the law does not go into effect until 2018. Similarly, Oregon's Equal Pay Act, which restricts questions on salary history, was signed into law on June 1, 2017, but employers cannot be sued for violating the pay history provisions until Jan. 1, 2019. 

Philadelphia was the first major U.S. city to pass such an ordinance. Philadelphia's pay history ban was slated to take effect on May 23, but due to a legal challenge by the Chamber of Commerce for Greater Philadelphia, the city delayed enforcement in light of the litigation. On June 13, the Chamber filed an amended request for an injunction that would block the ordinance.

Besides in Philadelphia, New York City Mayor Bill de Blasio signed into law a ban on salary history questions on May 4, which is set to take effect on Oct. 31.

On March 8, Puerto Rico passed the Puerto Rico Equal Pay Act, which includes provisions that prohibit employers from asking about an applicant's salary history. The penalty provisions of the act will not be effective until March 8, 2018.

A number of other states have provisions related to pay history as well. In California, for example, employers are prohibited from pointing to an employees' prior salary, by itself, to justify a disparity in compensation.

What This Means for Employers

From a practical perspective, Delaware employers should review their hiring practices to ensure that they are in compliance with H.B. 1 and that all employees and agents involved in hiring understand their obligations.

Republished with permission. © 2016 Duane Morris. All rights reserved.