By: Sarah K. Biran
Employers often ask job applicants a seemingly simple question: “How much are you making?” This question, however, may soon be prohibited during the hiring process. Across the nation, several jurisdictions have passed laws to prevent employers from inquiring about a job applicant’s salary history.
These laws are an effort to combat the history of pay inequity that has affected women and minorities. Questions about salary history can prolong the effects of this disparity if an employer uses previous earnings as a basis for setting a new employee’s pay, particularly if that employee was paid less in her old job than her co-workers.
Six states and the Commonwealth of Puerto Rico have each passed laws relating to salary history questions. While the state laws in New Jersey and New York, as well as local laws in New Orleans and Pittsburgh, apply only to public employers, the laws in California, Delaware, Massachusetts, and Puerto Rico apply to public and private employers. In addition, New York City and San Francisco have enacted laws prohibiting public and private employers from asking about salary history. Philadelphia has also passed a law prohibiting questions about salary history, but due to litigation, the law is not yet in effect.
While these laws all generally prohibit employers from either asking applicants about their current or past compensation or relying on information regarding past compensation in making hiring decisions or setting compensation, they differ in the details. None of the laws prohibit an applicant from voluntarily disclosing his or her current or past compensation. However, the laws are not consistent regarding what an employer can do with such information should an applicant disclose her salary. California permits an employer to consider voluntarily disclosed information; Massachusetts, on the other hand, appears to permit consideration of such information for purposes of confirming salary history, but not for purposes of setting compensation. And while the laws do not allow an employer to ask about current or past wages, San Francisco’s and New York City’s ordinances each explicitly permit an employer to “engage in discussion” with an applicant about his or her expectations as to salary, including any deferred compensation or bonus that the applicant would forfeit by leaving his or her current job. By contrast, the California statute does not address discussions regarding deferred compensation or bonuses.
The laws also differ regarding what information an employer must provide. California’s law requires that employers provide an applicant with the pay scale for the relevant position if an applicant requests it; neither New York City’s nor San Francisco’s ordinance addresses this issue.
Maryland’s legislature is currently considering a bill that would prohibit an employer from seeking wage or salary history from job applicants or relying on such information in determining pay for the successful applicant(s). It would also require employers to provide the pay scale for a position to an applicant upon request. The bill does recognize certain limited circumstances in which an employer can rely on wage history, but those circumstances occur only when the applicant has voluntarily provided wage history information to the employer after an offer has been made. The bill, HB512/SB377, is presently in committee after a February 20, 2018 hearing.
Nationwide employers or employers with offices in one or more of these jurisdictions should review their hiring policies and interview procedures to ensure that they comply with each jurisdiction’s procedures. Other employers, even if not yet subject to one of these law, may wish to consider revising their interview procedures since the trend toward prohibition of salary history questions is strong. Employers may wish to remove questions about compensation history from written job applications, to ask applicants about compensation expectations for the new position rather than about current or past compensation during interviews, and to provide salary ranges on job postings. Because this area of law is in such a state of flux, employers would be well-advised to stay informed about the status of salary history laws in their state and city and to consult with employment counsel regarding interview procedures.