Challenges Created by Evolving Salary History Ban Regulations
Salary History Ban
The legislation prohibiting employers from inquiring about current or historical candidate compensation was originally designed to reduce the perpetuation of the gender wage gap. Recently a judge ruled to reverse legislation restricting the salary history questions based on the First Amendment rights of Philadelphia employers. While similar legislation is being adopted by states and regions throughout the United States it seems that national legislation banning salary history may be a few years away.
Last updated November 2018
More employers are reviewing policies around previous salary information and salary history questions during the interview and onboarding process. This part of many hiring processes is coming into focus as more areas pass legislation banning these and similar questions from employers hiring and onboarding procedures. Organizations who operate in one of these areas affected by the salary history ban may opt to make their changes company wide rather than having specific policies for each location.
May employers ask about salary history? (State and Local):
Last updated July 2018
Impact on Employers
- Employers may still ask the candidates target pay range to gauge if the candidate is the right fit for the roles pay range.
- Asking this question early in the interview process can help Employers determine pay disparities and reduce time to fill positions
- Even if employers can access salary history information the heightened awareness of the Salary History Ban means that all employers nationwide will be subject to added scrutiny and must be able to show evidence to support decision to pay workers with similar roles and responsibilities different wages.
Whether is a company wide or regional strategy, addressing the salary history question and how to handle it is an important step when updating company policies. The desired effect of this legislation is to eliminate the perpetuation of both the gender and minority wage gaps within similar job titles at organizations over time. As a result of these laws, legislators expect employees to more freely discuss their compensation and pay the same rate for similar work.
To remain in compliance, and with the increase in implementation of remote work options, it's important for employers to consider both the regulations of their location as well as the location of all remote employees. For example, an organization based in Denver, Colorado may not be subject to any laws prohibiting questions about salary history, but if they are interviewing candidates who will work remotely from San Jose, California or Boston, Massachusetts then the restrictions in those cities and states would apply to their hiring procedure for those specific candidates.