It remains one of the most dreaded hiring process questions by job seekers everywhere - “What was your salary at your previous job?” Not only do applicants feel the question holds them back from advancing their career, but it perpetuates gender pay inequalities. In a fight for equal pay, an increasing amount of cities and states are joining the movement to ban salary history inquiries from the job application and hiring process.
Why is Banning Salary History Inquiries Important?
Laws banning salary history inquiries aim to stop employers from using applicants’ past salaries as the basis for determining current compensation and benefits. If an applicant were underpaid at a previous job, the new employer wouldn’t be influenced by that amount, as they wouldn’t have legal access to that information.
The importance of salary history bans becomes even more obvious when we look at gender pay gaps. According to the United States Census Bureau, nationally, women are paid 79 cents for every dollar men earn. One of the main goals of banning salary history inquiries is to close this gap in pay between men and women.
According to Glassdoor, the gender pay gap is real, both in the U.S. and around the world. In fact, their research found women to earn even less than the United States Census Bureau figures at 76 cents for every dollar men earn. Further, Glassdoor research into how to achieve a balance in pay among both genders found when employers had policies that embraced salary transparency, it helped to eliminate “hard-to-justify” pay gaps.
Where are Salary History Inquiries Illegal?
As of February 2019, there were 13 statewide and 11 local salary history inquiry bans in place. Taking an opposing stance to salary history bans, two states, Michigan and Wisconsin, have prohibited them, stating the local government cannot prevent employers from obtaining salary history information from prospective employees. If you’re wondering if your business is impacted, these states, cities, and counties have laws in place banning salary history inquiries:
California: A statewide ban was effective January 1, 2018, affecting private and public employers.
San Francisco: A city ordinance was passed July 1, 2018, affecting private and public employers, including city contractors and subcontractors.
Connecticut: A statewide ban was passed on January 1, 2019, impacting private and public employers.
Delaware: A statewide ban took effect December 14, 2017, impacting all employers.
Atlanta: Currently, there is not a statewide ban in Georgia; however, a city ordinance took effect on February 18, 2019, impacting city agencies in Atlanta.
Hawaii: A statewide ban was effective January 1, 2019, affecting all employers, employment agencies, and employees or agents thereof.
Illinois: A statewide ban was effective on January 15, 2019, affecting state agencies.
Chicago: A city ordinance was effective April 10, 2018, at the public level, impacting all city departments in Chicago.
Louisville: Currently, there is not a statewide ban in Kentucky; however, city agencies in the Louisville/Jefferson County Metro Government have been under a local ban since May 10, 2018.
New Orleans: Currently, there is not a statewide ban in Louisiana; however, a city ordinance was effective January 25, 2017, at the public level, impacting city departments in New Orleans.
Kansas City: Currently, there is not a statewide ban in Missouri. However, a city ordinance was effective July 26, 2018, impacting city departments in Kansas City.
New Jersey: A statewide ban was effective February 1, 2018, impacting state entities.
New York: A statewide ban was effective January 9, 2018, impacting state agencies and departments under the authority of the governor.
New York City: The city ordinance took effect October 31, 2017, impacting all employers, employment agencies or employees, or agents thereof.
Albany County: The city ordinance took effect on December 17, 2018, impacting all employers.
Suffolk County: Affecting all employers in Suffolk County, the salary history ban is expected to take effect on June 30, 2019.
Westchester County: The salary history inquiry ban took effect on June 9, 2018, in Westchester County, and impacts employers, labor organizations, employment agencies or licensing agencies, or an employee or agent thereof.
Oregon: A statewide ban was effective October 6, 2017, impacting all employers.
Pennsylvania: A statewide ban was effective in September 2018, impacting state employers.
Philadelphia: Philadelphia's salary history ban remains on hold due to a legal challenge.
Pittsburgh: A city ordinance was passed on January 30, 2017, impacting all city agencies and offices.
Puerto Rico: A Commonwealth-wide ban was effective March 8, 2018, impacting all employers. Read about the law Puetro Rico Office of Legislative Services website.
Vermont: A statewide ban was effective July 1, 2018, impacting all employers. Read about the law on the Vermont General Assembly website.
What About Kansas City Private Employers?
The salary history ban only applies to city jobs in Kansas City; however, the city’s goal is to hopefully extend the ordinance to private employers. Just as Kansas City took the first step with ‘Ban the Box’, which later impacted private employers, they hope for the same result here.
In a KCTV5 interview, Kansas City Councilman Scott Wagner said, “What we really want to do is to show employers in the private sector that if we can do it, they can do it too. Just as we had in the ‘Ban the Box’ discussion, the city took the lead and a couple of years later passed an ordinance, actually, just recently, that applied to all employers in Kansas City, Missouri. So, we hope that we can show leadership in this area.”
Additionally, the council said they would ask businesses with city contracts to follow the Kansas City salary history ban ordinance.
What Steps Should Employers Take?
With legislation introduced, passed, or pending across the United States, the salary history inquiry ban will continue to pick up momentum, making it important for employers to stay on top of this hot issue, especially multi-state employers.
Here are five steps to take if your business is located in an area with a salary history ban:
Review and update hiring documents.
Set predetermined compensation ranges for company positions.
Provide manager training.
Avoid releasing past employee salary data.
Document any instance of an applicant voluntarily disclosing salary history information; let the applicant know it will not be used to determine compensation.
Ensuring compliance during the hiring process is becoming increasingly complicated. Salary history inquiry bans are yet another legal risk employers must successfully navigate to prevent possible lawsuits. When business owners outsource their human resources to a professional employer organization, like Axcet HR Solutions, they gain peace of mind knowing a team of experienced human resources professionals is on top of all of the latest hiring laws, helping to ensure compliance.