States take pay disparity laws a step further by banning pay history inquiries

by McAfee & Taft
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McAfee & Taft

Many states already have laws aimed at closing the wage gap. Whether they are couched as pay disparity, pay equity, equal pay, or pay transparency laws, the goal is the same – equal pay to women for equal work.

Some states have taken pay equity laws a step further by prohibiting employers from inquiring about the salary history of their applicants. Oklahoma companies with employees in other states should keep track of these developing laws for the states in which they hire.

For example, California recently passed a law stating that an employer cannot rely on salary history information of an applicant for employment as a factor in determining whether to offer employment to the applicant or what salary to offer the applicant. Specifically, the California law states “an employer shall not, orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant for employment.” Conversely, upon reasonable request from the applicant, the employer shall provide the pay scale for the position at issue. Nothing in the law prohibits an applicant from voluntarily disclosing his or her pay history without any prompting from the employer. This law takes effect January 1, 2018.

The Massachusetts legislature similarly decided to prohibit employers from seeking 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. 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. A prospective employer may also 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. This law becomes effective July 1, 2018.

New York City, Philadelphia, Delaware and Oregon also have similar laws, some of which just became effective in October 2017 and some of which will become effective in the near future.

Employers who have operations in any of these states should begin modifying their hiring and onboarding practices to comply with these laws. Requests for pay rates or salary history should be removed from employment applications. Company policies should be revised to ensure no unlawful requests for pay history are made. Interviewers should ensure they do not request pay history information when considering an applicant for employment. And in some states, employer background check and onboarding practices need to be updated so as not to seek verification of pay history information from an applicant’s prior employer.

Employers should also be aware that these state laws signal a trend, and that many other states and cities are likely to follow suit. Keep an eye out for similar pay history ban laws to pop up in other states.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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