Similar to the proliferation of “ban-the-box” laws that prohibited employers from inquiring into an applicant’s criminal history, states and cities have started to pass legislation banning employer inquiries into an applicant’s salary history during the new-hire process.
Employers maintain that this information is necessary as part of the recruiting process and in evaluating candidates. They say prohibiting them from requesting such information would be an impediment to being able to understand market levels of compensation for various employment positions.
However, some believe inquiries into salary history have perpetuated gender wage inequality.
Most recently, the New York City Council approved a bill that would prohibit employers in the city from inquiring about an applicant’s salary history during all stages of the employment process.
New York joins several states and cities, including Massachusetts, California, Philadelphia, Pittsburgh, New Orleans and Washington, D.C., that have all taken some measure to limit these types of inquiries. Other states, such as Texas and Maryland, have pending legislation on the issue and it is expected that more cities and states will follow.
Some laws limit an employer’s ability to rely on an applicant’s past salary information when making an offer of employment. Other laws completely prohibit employer inquiries of applicant salary history.
Some states encountered resistance when similar bills were introduced. For example, in Virginia, a bill that would have prohibited employers from asking interviewees for their salary history, was rejected. The New Jersey State Senate failed to override Gov. Chris Christie’s conditional veto of a similar bill.
Even legislation that has been enacted is facing legal challenges. The Philadelphia Chamber of Commerce has challenged Philadelphia’s wage equity law, which was set to go into effect May 23, 2017. The city has now stated it will hold off on enforcing the legislation until a federal judge rules on a petition to block the legislation. Further, Connecticut recently dropped the “salary history” prohibition from its bill to ensure gender pay equity.
There are nuances between each state and city’s version of the salary inquiry prohibitions and the associated penalties for violations. It is expected that these laws will likely result in an increase in equal pay claims against companies.
Employers would be well advised to check if there are any laws or pending legislation that may impact their ability to ask questions about salary history on applications or during the hiring process and have their hiring processes reviewed by an employment attorney to ensure compliance with the law and avoid potential litigation.
Caroline J. Berdzik is a partner with Goldberg Segalla LLP in Princeton, N.J. She devotes her practice to helping corporate clients navigate employment law issues from proactive counseling through dispute resolution and trial. Her clients include transportation companies. She can be reached at email@example.com.