Wait, we ask about an applicants’ salary history. Can we still do this? (part 4)

As part of efforts to ensure pay equality, many states and localities across the United States have passed laws that prohibit employers from inquiring about an applicant’s salary history at various stages of the hiring process. As a result, employers may need to revise their employment applications and the questions they ask during the interview process. While some employers became subject to these laws in 2017, several more laws are set to take effect in 2018. We have highlighted these laws below.

Laws Effective in 2018

• California:  Effective Jan. 1, 2018, California’s Equal Pay Law will expand to prohibit employers from seeking, either orally or in writing, salary history information from an applicant. Salary history information includes both wage and benefit history. Employers may discuss salary history if an applicant “voluntarily and without prompting” discloses the information to the employer. Upon request, employers must also provide applicants with a pay scale for the position sought. Notably, San Francisco also passed an ordinance, which will take effect July 1, 2018, with similar provisions. 
• Massachusetts:  Beginning July 1, 2018, Massachusetts’s Act to Establish Pay Equity will prohibit employers from: (1) requesting applicant wage history; and (2) screening applicants based on their wages. In addition, employers may not seek wage information from the applicant’s current or former employers, unless the employer obtains the applicant’s express, written consent and has extended an offer of employment that includes the proposed compensation for the position. Employers also may not prohibit employees from discussing, disclosing or inquiring about wage information with other employees (employers should note that such prohibitions may already run afoul of the National Labor Relations Act).

Laws Effective in 2017

• Delaware:  Effective Dec. 14, 2017, Delaware employers cannot seek an applicant’s compensation history directly from an applicant or from his/her current or former employers. Employers also cannot screen applicants based on this information. Under the law, compensation includes wages, as well as other forms of compensation and benefits. If an applicant voluntarily discloses his/her prior salary history, employers may consider such information in setting the applicant’s compensation. Employers may request compensation information for the sole purpose of confirming an applicant’s compensation history only after an employment offer that includes the proposed compensation has been extended to the applicant. 
• New York City, New York:  As of Oct. 31, 2017, an amendment to the New York City Human Rights Law makes it unlawful for an employer to request that an applicant, or his/her current or former employer, disclose the applicant’s salary history. Employers are further prohibited from publically searching for an applicant’s salary history. Salary history includes current and prior wages, as well as benefits and any other forms of compensation. The employer may use the applicant’s salary information to determine salary, benefits and other compensation only in the event that an applicant offers his/her salary history voluntarily and without prompting. Employers may, however, discuss an applicant’s salary expectations and inform the applicant about the anticipated salary for the position sought. 
• Oregon:  The Oregon Equal Pay Act, in effect since Oct. 6, 2017, prohibits employers from asking applicants about their current pay and from basing an applicant’s pay on their current or past compensation. Employers may only ask for such information after extending a job offer that includes compensation information. 

Even if these laws do not currently impact your employment practices, employers should continue to monitor state and local legislation, as this legislation trend is likely to continue to spread to other municipalities and states.

This post is part of Godfrey & Kahn's mini series The days of our [employment] lives.

• Part 1: Sick leave spreads from coast to coast in time for flu season
• Part 2: More moms and dads guaranteed time off in 2018
• Part 3: You too – time to review your anti-harassment policies
• Part 4: Wait, we ask about an applicants’ salary history. Can we still do this?
• Part 5: Recruiting employees in other states? It may be time to remove criminal history inquiries from your applications