Think Before You Ask: New Laws Banning Employers From Asking Job Applicants About Their Salary and Wage History
Many standardized job applications contain a section asking applicants for the names of their prior employers, dates of employment, and the salary or wage they earned. Nationwide employers beware: this practice could be unlawful, depending on where you operate.
To promote fair employment practices and close the pay gap for women and people of different races, many states and municipalities are passing laws that either ban the salary/wage history question outright, or provide that salary/wage history cannot be the basis for a pay differential between genders or races who perform similar work.
California
California’s Equal Pay Act now provides that salary/wage history cannot be the basis for a pay differential between genders or races who perform “substantially similar work.” Although there is no outright ban on the salary history question, as a California employer, it’s much easier to argue that you did not rely on this impermissible factor if you did not ask about it on the employee’s job application.
Massachusetts
The Massachusetts Pay Equity Act, which will take effect July 1, 2018, prohibits all employers from requiring applicants to provide their salary/wage history before receiving a formal job offer. The law is aimed at preventing pay discrimination for comparable work based on gender. It does not, however, prohibit employers from gathering information about a prospective employee’s compensation from other publicly available sources. The Act also leaves open the possibility that a prospective employee may “voluntarily” disclose their salary history, and the employer may then “confirm” that salary history with the employee’s former employer, but only after either the prospective employee has voluntarily disclosed wage or salary history, or after an offer of employment with compensation has been negotiated and made to the prospective employee.
City of Philadelphia
The Philadelphia Wage Equity ordinance, which was scheduled to take effect May 23, 2017, [1] would prohibit all employers from inquiring about a prospective employee’s wage history, requiring disclosure of wage history, or conditioning employment or consideration for an interview or employment on disclosure of wage history. The ordinance also would prohibit employers from relying on the wage history of a prospective employee in determining the wages for such individual at any stage in the employment process, including the negotiation or drafting of any employment contract. There is a narrow exception to this rule if the applicant “knowingly and willingly disclosed his or her wage history to the employer” – which then opens the door for the employer to confirm this information.
City of New York
On May 4, 2017, New York City Mayor Bill de Blasio signed into law a bill that prohibits both private and public sector employers from inquiring about an applicant’s salary history. The new law, which will take effect October 31, 2017, amends the New York City Human Rights Law by adding a provision that makes it an “unlawful discriminatory practice” for an employer to make any salary inquiry of an applicant, or the applicant’s current or former employer, or a current or former employee or agent of the applicant’s current or prior employer. An employer is also prohibited from conducting any form of search through publicly available information for a prospective employee’s salary history. The law also makes it an unlawful discriminatory practice for an employer to consider an applicant’s salary history in determining the salary, benefits, or other forms of compensation for that applicant. However, if an applicant voluntarily and without prompting provides salary history, then this information can be used to determine the salary, benefits, and other compensation, and the employer may verify the salary history.
[1] A lawsuit was filed in federal court in the Eastern District of Pennsylvania seeking a preliminary injunction to prevent the ordinance from taking effect: The Chamber of Commerce for Greater Philadelphia v. City of Philadelphia and Philadelphia Commission on Human Relations, Case No. 2:17-cv-01548 (E.D. Pa. filed April 6, 2017). The ordinance is on hold, pending resolution of the lawsuit.