Salary History Ban: Legislative Changes and Employer Strategy

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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.

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.

CURRENT REGULATIONS

May employers ask about salary history? (State and Local):

California

No. Unless offered voluntarily
and without prompting,
employers may not seek an
applicant’s salary history or
rely on it to determine whether
to offer employment or what
salary to offer. Prior salary
will not justify disparities in
compensation
San Francisco (Eff. 7/1/2018
penalties 7/1/2019): Same
as above, but also may not
retaliate due to failure to
disclose salary history; may
not release salary history
of current employee to
prospective employer without
written consent (with limited
exceptions); and must post
notice of rights.
May discuss
compensation that applicant
would forego in order to take
the new job (e.g. unvested
equity, deferred comp or bonus)

Connecticut

State law (Eff. 1/1/2019): No,
unless a prospective employee
has voluntarily disclosed
such information, or unless
the request is pursuant to
any federal or state law that
specifically authorizes the
disclosure or verification.
The law does not prohibit an
employer from inquiring about
components of a prospective
employee’s compensation
structure, so long as employer
does not inquire about the
value of the elements of such
compensation structure

Delaware

No, employers cannot seek
the compensation history of
an applicant or seek the same
from the applicant’s current
or prior employer prior to
offer acceptance (after offer
acceptance, may request only
for purposes of confirming
compensation history).
Employers cannot screen
an applicant based on their
compensation history, including
requiring that compensation
history meets minimum or
maximum criteria

Hawaii

Pending (Eff. 1/1/2019): No.
Unless offered voluntarily and
without prompting, employers
may not inquire about, search
public records for, or rely on
salary history of applicants in
the hiring process

Massachusetts

No, cannot seek salary history
from a prospective employee
or current or former employer
before an offer. If a prospective
employee has voluntarily
disclosed salary history
information, the employer can
confirm prior wages or salary or
permit a prospective employee
to confirm prior wages or salary.
Cannot require that prior wage
or salary history meet certain
criteria. Prior wages are not a
defense to equal pay complaint

Michigan

Yes. State law prohibits local
jurisdictions from implementing
salary history bans

New York

New York state: Currently not
addressed
New York City: No, employers
or their agents cannot seek
the compensation history of an
applicant, seek the same from
the applicant’s current or prior
employer, or conduct public
records review to determine
prior salary. Cannot rely on the
salary history of an applicant
in determining the salary,
benefits or other compensation
for such applicant during
the hiring process, including
the negotiation of a contract
unless disclosed voluntarily and
without prompting. May discuss
compensation that applicant
would forego in order to take
the new job (e.g. unvested
equity, deferred comp or bonus)
Albany County: No, cannot
request that an applicant
disclose his/her wage or
salary history or seek the
same from applicant’s current
or former employer; cannot
screen applicants based
on wage history (inclusive
of compensation, salary or
other benefits); may confirm
prior wages, with written
authorization from applicant,
after making an offer that
includes compensation
Westchester County: No,
cannot rely upon wage history
to determine wages or require
as a condition of interview
or offer that a prospective
employee disclose wage history
information. May rely on salary
history when it is voluntarily
provided by an applicant to
support a wage higher than the
wage offered by the employer

North Carolina

Currently not addressed, but
there is pending legislation

Oregon

No, cannot seek salary history
from applicant or prior employer
before offer. Can confirm
prior compensation after
offer that includes amount of
compensation, with written
authorization of prospective
employee. (Eff.10/6/2017, no
private right of action until
2024)
Pending (eff. 1/1/2019): Cannot
screen job applicants based on
current or past compensation, or
determine compensation based
on current or past compensation

Pennsylvania

Philadelphia only (partially
enjoined by legal challenge):
Employers cannot rely on wage
history in determining the wages
for applicants at any stage
in the employment process,
unless the applicant knowingly
and willingly discloses salary
history.
The provision of the
Philadelphia law that prohibited
inquiries about wage history
was enjoined by a court on First
Amendment grounds

Puerto Rico

No, cannot seek salary history
from a prospective employee
before an offer. If a prospective
employee has voluntarily
disclosed salary history
information, the employer can
confirm prior wages or salary or
permit a prospective employee
to confirm prior wages or salary

Vermont

No, employers may not
inquire about compensation
history. Employers cannot
screen an applicant based on
their compensation history,
including requiring that
compensation history meets
minimum or maximum criteria.
If a prospective employee
voluntarily discloses the
information, an employer may
confirm it after making an offer
with compensation

Washington

Salary history inquiries are
not banned but an employee’s
salary history is not a defense to
an equal pay claim

Wisconsin

Yes. State law prohibits local
jurisdictions from implementing
salary history bans

Last updated July 2018

Impact on Employers

Employer Positives
  • 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
Employer Negatives
  • 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.