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Employers Should Stay Up-To-Date On Growing Trend To Prohibit Salary/Wage History Inquiries

Published by and on March 14, 2017

Pay equity, including a focus on prohibitions of wage history inquiries, will continued to be at the forefront of employment law issues facing employers in 2017.

With a continued focus on pay transparency and equal pay nationwide, many state and local lawmakers are proposing and enacting legislation that restricts employers from asking applicants and employees for information about their salary and wage histories. Lawmakers hope that by prohibiting employers from attempting to base a new employee’s salary on what they were previously paid, any wage gaps that may be affecting women and minorities from the beginning of their careers will be closed or at least minimized.

These laws are very recent, with Massachusetts becoming the first state to pass such legislation in August 2016. Effective July 1, 2018, Massachusetts Senate Bill 2119 will make it unlawful for an employer to “seek the wage or salary history of a prospective employee from the prospective employee or a current or former employer or to require that a prospective employee’s prior wage or salary history meet certain criteria; provided, however, that: (i) if a prospective employee has voluntarily disclosed such information, a prospective employer may confirm prior wages or salary or permit a prospective employee to confirm prior wages or salary; and (ii) a prospective employer may seek or confirm a prospective employee’s wage or salary history after an offer of employment with compensation has been negotiated and made to the prospective employee.”

Similarly, in November 2016, New York City Mayor Bill de Blasio signed Executive Order 21 prohibiting New York City agencies from asking prospective employees about their salary history before making an offer of employment. The Executive Order, which became effective on December 4, 2016, makes it illegal for a City agency to seek to obtain information regarding a prospective employee’s salary history either through direct questioning of the prospective employee or through searches of public records prior to making a conditional offer of employment. The Order allows for City agencies to inquire about previous salary only after making a conditional offer of employment that includes the salary for the job. New York City also introduced a proposed bill, Intro. 1253, that, if enacted, will extend the wage history inquiry ban to private employers.

On January 23, 2017, Philadelphia became the first city in the United States to have a law prohibiting employers from inquiring about a prospective employee’s wage history at any point during the hiring process. Effective May 23, 2017, Philadelphia Bill No. 160840, the “wage equity ordinance,” will make it unlawful for an employer to: (1) inquire about a prospective employee’s wage history; (2) require disclosure of wage history; (3) condition employment or consideration for an interview on disclosure of wage history; or (4) retaliate against a prospective employee for failing to comply with any wage history inquiry. The ordinance will also prohibit employers from relying on a prospective employee’s wage history in determining the wage rate for that individual unless he or she “knowingly and willingly” disclosed his or her wage history to the employer.

On January 25, 2017, New Orleans Mayor Mitch Landrieu signed Executive Order MJL17-01, which prohibits questions about wage history during the application process for individuals seeking employment with the City of New Orleans. This order indicates New Orleans’ interest in addressing pay equity issues and employers should be on the lookout for further legislation that would extend this prohibition to private employers.

On the federal level, the Pay Equity for All Act of 2016 (H.R. 6030) was introduced in Congress on September 14, 2016. The proposed law would amend the Fair Labor Standards Act to prohibit employers in all 50 states from asking a prospective employee to disclose information about their wage history.

Several states —- including Connecticut, Indiana, Mississippi, Missouri, and the District of Columbia —- have similar legislation pending. Even Texas recently introduced House Bill 290 in the state legislature, which would make it illegal for an employer to include a question regarding an applicant’s wage history information on an employment application, inquire into or consider an applicant’s wage history information, or obtain an applicant’s wage history information from his or her previous employer.

Welter Insight

Pay equity, including a focus on prohibitions of wage history inquiries, will continued to be at the forefront of employment law issues facing employers in 2017. Employers in jurisdictions where wage history inquiries are now prohibited should immediately consider:

  1. reviewing employment applications and hiring materials to determine whether the materials require disclosure of a prospective employee’s wage history;
  2.  advising all managers, supervisors, human resources personnel and other employees with hiring authority and involved in interviewing candidates about the wage history inquiry prohibition and training them to comply;
  3. revising interview outlines/scripts to eliminate questions about a prospective employee’s wage history.

Because this trend will continue, employers in other jurisdictions should stay up-to-date on any pending legislation that may prohibit employers from asking prospective employees about their wage histories.

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