New Laws Prohibit Asking Applicants About Previous Salary
In an effort to promote pay equality, several jurisdictions have enacted ordinances restricting the information an employer can obtain regarding the candidate’s salary history. Some HR professionals use salary to determine how likely the candidate is to accept the offer and other times to determine how much to offer, which candidates say put them at a serious disadvantage. This is especially true for people who have not been paid their market value in the past.
There may be more cities and states jumping on board in the near future, but even if your state isn’t listed here it is worth considering how to address what is a rather controversial question during a job interview. Below are the new laws that have recently or will soon go into effect, so make sure you change your company policy as needed if you are in these jurisdictions.
NEW YORK CITY
(Intro. 1253), goes into effect October 31.
- This dictates that it is an unlawful, discriminatory practice for an employer to inquire about or rely upon the salary history of a job applicant to determine their salary amount during the hiring process, including the negotiation of a contract.
- An applicant’s salary history includes current or prior wage, salary, benefits or other compensation.
- The bill allows employers to discuss with job applicants their expectations about salary, benefits and other compensation.
- If an applicant, voluntarily and without prompting, discloses salary history to an employer, the employer may consider salary history in determining salary, benefits and other compensation for such applicant, and may verify that salary history.
On October 12, 2017, Governor Jerry Brown signed into law a statute that prohibits employers from seeking salary-history information, (AB-168). The new statute will go into effect on January 1, 2018.
- Salary-history included compensation and benefits information about an applicant for employment.
- This prohibition applies both to salary-history inquiries made directly by an employer or inquiries made by an agent acting on behalf of an employer.
- The new statute, which applies to all employers in California, also prohibits employers from relying in whole or in part on salary-history information about an applicant in determining whether to offer employment to the applicant or what salary will be offered to the applicant.
- However, if an applicant voluntarily discloses salary-history information to a prospective employer, the employer may take that information into consideration in determining the salary to be offered to the applicant.
- The statute further requires employers to disclose the pay scale for a position to an applicant who makes a reasonable request for that information.
The Delaware measure (House Bill 1) was signed June 14 by Gov. John Carney, and is slated to take effect in December 2017. Here’s what you need to know:
- This Act prohibits employers from inquiring into an applicant’s compensation history.
- An applicant may voluntarily disclose the information if he or she wishes to do so.
- The bill permits discussion and negation of compensation expectations between an employer and applicants, so long as the employer does not affirmatively seek compensation history.
- An employer can only seek and confirm compensation history ONLY AFTER an offer, including compensation, has been negotiated, made, and accepted.
The more sweeping Oregon Equal Pay Act (House Bill 2005) was signed June 1 by Gov. Kate Brown and takes effect on October 6, 2017. The act addresses more than salary history inquiries.
- The Act expands the State’s existing equal pay provisions, prohibiting pay discrimination based on race, color, religion, sexual orientation, national origin, marital status, disability, age, or veteran status.
- In clarifying what does and doesn’t constitute pay discrimination, the law provides that pay disparities are permitted if they exist because of seniority systems, merit systems, earnings that are tied to quantity or quality, workplace locations, travel, education, training, experience, or a combination of those factors.
In accordance with recently enacted (Bill S.2119) in Massachusetts, the following applies, effective immediately:
- Employers will need to update their job applications to remove salary inquiries to comply with a new law signed on Aug. 1.
- The general purpose of the Massachusetts Pay Equity Act—which is scheduled to take effect in 2018—is to close the gender gap and make it unlawful for employers to pay men and women different rates for “comparable work”.
- The law will also prohibit employers from screening job candidates based on their previous salary or asking salary-related questions until AFTER an offer is made.
- Additionally, employers won’t be able to contact an applicant’s former company to confirm the wage amount until AFTER an offer is made.
- After an offer is made, employers will only be able to verify past wage amounts if they have written permission from the applicant.
(Bill No. 160840) described below is effective immediately.
- This bill makes it unlawful for an employer, or agent thereof to inquire about a prospective employee’s wage history or condition employment on disclosure of wage history.
- It is also unlawful to rely on the wage history from any source in determining the wages for such individual unless such applicant knowingly and willingly disclosed his or her wage history to the employer or their agent.
Almost two months after signing sweeping employment law reform, Governor Ricardo Rosselló has signed Puerto Rico Act No. 16 of March 8, 2017, known as the “Puerto Rico Equal Pay Act.” Act 16 is effective immediately.
- Like the federal Equal Pay Act, Act 16 establishes a general prohibition of pay discrimination based on sex among employees in jobs that require equal skill, effort, and responsibility.
- Additionally, Act 16 prohibits employers from inquiring into an applicant’s past salary history, unless the applicant volunteered such information or a salary was already negotiated with the applicant and set forth in an offer letter, in which case an employer can inquire or confirm salary history.
LOOK FOR MORE RESTRICTIONS LIKE THIS
As more jurisdictions enact salary history bans, employers will undoubtedly face new compliance challenges. While most would agree that pay inequity should be rooted out, employers don’t necessarily support the spread of new pay equity laws.