Outlawing Salary History Questions

Combating the Wage Gap from Different Angles

To address the gender wage gap and other pay inequities in the workplace, more states and even some cities have taken affirmative measures aimed at eliminating pay differentials on the basis of sex. In some cases, these measures apply to other protected groups as well. Some of the approaches to reducing the pay gap between men and women have included state laws prohibiting gender discrimination, increasing the minimum wage, establishing fair scheduling practices, strengthening equal pay protections, requiring pay transparency, and providing paid sick and family leave.

Salary History Ban

Despite legislative inroads, women still earn only 80 cents for every dollar earned by men, a gender wage gap of 20 percent. The wage differential between women and men was shrinking for many years but research shows that the wage ratio has stalled in recent years. As a result, some cities and states are taking a new approach to wage disparity – laws which prohibit employers from asking job applicants about their salary history.

Massachusetts took the lead last year when it passed the country’s first law prohibiting employers from asking job applicants about their salary history. This year, Philadelphia, New York City, Oregon and Delaware also passed laws prohibiting employers from using salary history in the hiring process. Last month, San Francisco became the latest locality to prohibit employers from asking job applicants about their salary history or from considering earnings information in determining whether to hire an applicant and what salary to offer them.

One rationale for prohibiting salary history questions is that pay inequality can follow a worker. Women start out at lower salaries and carry their lower earnings history from job to job. Using salary history as a reference point for hiring or salary decisions keeps women trapped in a cycle of inferior compensation. Salary history also creates an employer bias that affects salary negotiations, applicant screening, and valuation of an applicant’s experience and achievements. Employer groups defend the salary history question on the ground that it reveals market wage rates and matches employers with candidates who have the same salary expectations for a given position.

Outlook

On the federal level, a bill that would disallow the salary history question, termed the Paycheck Fairness Act, has fizzled out every year since it was first proposed in 2009. Still, salary history legislation is expected to become more widespread on the state and local government levels. Nearly half the states considered such bills this year. Meanwhile, employers covered by enacted salary history laws will be required to comply as follows:

  • Philadelphia – May 23, 2017 (in litigation)
  • New York City – October 31, 2017
  • Delaware – December 1, 2017
  • Massachusetts – January 1, 2018
  • San Francisco – January 1, 2018
  • Oregon – January 1, 2019

Given current wage and gender legislation, employers do not need to wait for a salary history law to take effect in their locality before reviewing hiring and compensation practices to ensure their pay practices are fair and equitable.

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