Pay equity, diversity and inclusion
More States and Cities Banning Salary History Inquiries [UPDATE]
It’s an unfortunate truth that pay disparities continue to exist in the U.S. workforce. The good news is that we are moving towards a future that is correcting that issue. Over the last two years, in an effort to alleviate the pay disparity between men and women across the U.S., some state,county and local governments are taking the initiative to close the gap.
So far this year, California, Massachusetts, Michigan, New Jersey, Pennsylvania and Vermont have put into effect laws banning an employer’s inquiry into job applicants’ prior salary history in the hiring process.
Pennsylvania’s was the latest to put its new state law into effect, which happened this fall. The law prevents State agencies from asking about a job applicant’s current or historical compensation during the hiring process. Additionally, all job postings must indicate a position pay range.
Oregon, Delaware, and New York in 2017 passed statewide laws banning employers operating within the state from inquiring about job applicants’ previous salary earnings and compensation during the hiring process.
The Commonwealth of Puerto Rico restricts employers from inquiring into an applicant’s pay history, but does allow applicants to voluntarily share this information after they have received the job offer.
Effective January 1, 2019, both Connecticut and Hawaii will start enforcing statewide bans on employers inquiring about previous salary earnings.
Cities are also taking action.
Kansas City, Missouri, has passed legislation banning salary history. The law states that, “If there is a need for salary information, the City shall not inquire about an applicant’s salary history until after an individual otherwise qualified for the position, has been hired at an agreed upon salary.”
In Chicago, Illinois, Executive Order No. 2018-1 became effective on April 10 of this year, enacting a law banning city departments from inquiring into job applicant’s salary histories.
On May 17, 2018, the City of Louisville, Kentucky banned City agencies from inquiring into applicant’s salary histories. The new law referenced data crunched by the American Association of University Women (AAUW) that found that “on average, women working full-time, year-round, were paid 80 percent of what men were paid in Kentucky, resulting in men taking home an average of nearly $10,000 more than women annually, with an even greater wage gap for some racial groups and age groups.”
San Francisco, California, has banned employers from considering current or past salary of an applicant in determining whether to hire them or what salary to offer them. In addition, former employees’ salary information cannot be disclosed.
New Orleans, Louisiana, on January 25, 2017, enacted a law banning city agencies from asking for applicants’ salary histories.
Other cities with salary bans include Salt Lake City in Utah and Louisville in Kentucky.
Counties and cities in New York state also have salary history bans in place. In New York City, employers are prohibited from requesting information pertaining to previous benefits and salary. If the information is obtained, it cannot be used to determine current pay. In Albany County, employers cannot request information about past salary earnings and benefits until after a job offer is extended. Westchester County similarly prohibits employers from inquiring about previous wages and only in certain situations may prior earnings determine pay.
Before Pennsylvania passed its state law, Pittsburgh had banned city agencies and offices, starting in January 2017, from asking about an applicant’s prior pay. In Philadelphia, a proposed salary history ban that was to go into effect in May 2017 was put on hold until a lawsuit was addressed. A federal district court judge this May ruled that the city’s ban on salary history inquiries violates the First Amendment, but upheld the provision prohibiting the use of salary history to set rates of pay. That decision has been appealed to the U.S. Court of Appeals for the Third Circuit.
If your organization has operations in these states and cities get prepared to comply with these history salary bans and other evolving equal pay laws as they surface. Employers should try to get ahead of this trend by reviewing job hiring processes and paperwork to see if their companies’ practices are consistent with new trends in pay equity law, including such practices as refraining from asking applicants about their previous salary. The demand for pay equality is only going to grow, continuing to put pressure on legislators at all levels to consider implementing similar pay equity legislation across the country.
To learn more about achieving pay equity, click here.