Vermont Enacts Salary History Inquiry Law

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On May 11, 2018, Vermont Governor Phil Scott signed legislation restricting employers from making salary history inquiries. The new law, H. 294, effective July 1, 2018, prohibits asking a prospective, current, or former employee about or seeking information regarding his or her compensation history. For these purposes, compensation includes base compensation, bonuses, benefits, fringe benefits, and equity-based compensation. Under the new law, employers are also prohibited from requiring that a prospective employee’s current or past compensation satisfy minimum or maximum criteria for employment. If an employer discovers a prospective employee’s salary history, the employer may not determine whether to interview the prospective employee based on this information.

The Vermont bill carves out a few exceptions to these restrictions. If the prospective employee voluntarily discloses his or her salary history, the employer may seek to confirm or request that the applicant confirm the disclosed salary after making an offer of employment. An employer may also ask a prospective employee about general salary expectations.

A String of Salary History Legislation

Vermont's new law is the latest in a growing trend. Ten other jurisdictions, both at the state and local levels, have passed similar bills or ordinances.1 The Vermont version includes elements of laws enacted in other jurisdictions.  

Like the laws enacted in Massachusetts, Delaware and Puerto Rico, Vermont's law allows the employer to confirm a salary history the applicant has voluntarily disclosed after the employer has made an offer. (Massachusetts and Delaware both further require that the offer be accepted before inquiring.) Vermont also borrows from an Albany County, New York ordinance that prohibits requiring a prior salary to satisfy minimum or maximum criteria for employment.

The exceptions to these salary history laws are notable. Like the ordinance enacted in New York City, most jurisdictions that have passed laws banning the use of salary history permit discussion or negotiation of salary expectations. Westchester County, New York took the additional step of prohibiting retaliation against a prospective employee who refuses to disclose salary history.  San Francisco requires employers to obtain written authorization from former employees before disclosing their salary to another employer. California also allows employers to consider and review salary history information made publicly available pursuant to federal or state law. Oregon passed a salary history law similar to Vermont’s, but it allows the use of salary history when the employee is seeking a job transfer or promotion with a current employer.2

This legislative trend is expected to continue. In fact, Connecticut Govenor Dannel P. Malloy has stated he intends to sign a bill that similarly prohibits employers from asking job applicants about their pay history.

We will continue to monitor this patchwork of salary history bills and report on any significant developments.

 

Footnotes

1 Key provisions of a salary history ordinance adopted in Philadelphia, Pennsylvania have been struck down as unconstitutional.

2 Or. Rev. Stat. § 652.220(d) (2018).

 

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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