Although opinions differ as to the cause, the wage gap between male and female workers persists even today – on average, women earn roughly 80% of what men earn over the course of a lifetime. Some equality advocates have argued that the common employer practice of using a new hire’s previous salary to determine their starting pay perpetuates the problem even if it doesn’t directly cause it, because it means that one sexist pay practice can affect a person’s salary through the course of their career.
In an attempt to promote pay equity, states and municipalities have recently begun passing laws which prohibit employers from requiring a new or prospective employee to provide information on their previous salary. During its 2018 legislative session, Vermont became the 6th state to restrict private and public employers from inquiring about a prospective employee’s salary history. (U.S. Territory Puerto Rico has also passed a salary history law, and other states have placed similar restrictions which only apply to state agencies.)
Vermont Salary History Ban
Vermont’s H 294, which comes into effect on July 1, 2018, prohibits an employer from inquiring about a prospective employee’s current or past compensation. “Compensation” is defined within the statute to include not only wages and salary, but also compensatory elements such as bonuses, benefits, fringe benefits and equity-based compensation.
Under the new law, employers are restricted from seeking information about past or current compensation from the prospective employee and/or their current or former employer. Employers are also restricted from requiring that a prospective employee’s current or past compensation satisfy a minimum or maximum criteria.
The bill specifies that the law does not restrict a prospective employee from voluntarily disclosing information about their past or current salary. If the prospective employee volunteers the information, the employer is allowed to confirm the information in order to verify its accuracy. However, the employer can only seek confirmation after an offer of employment with compensation has been made to the prospective employee. Additionally, if the employer is aware of the prospective employee’s current or past compensation, the employer may not rely on that information to decide whether or not to interview the prospective employee.
The bill also specifies that the employer is not restricted from inquiring about a prospective employee’s salary expectations or requirements regarding the open position, or from providing information about the wages, benefits, or salary that are associated with the position that the prospective employee is seeking.
Employers operating within the state should ensure that job applicantions and interview processes are in compliance with the Vermont salary history ban before July 1, 2018.
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