New laws prohibit screening of past pay histories
Numerous federal, state and local laws require employers to pay women and men similar wages for similar work. Attempts to narrow the wage gap further have come in the form of "past pay privacy" laws that prohibit employers from seeking certain information about an applicant's salary history.
Over the last year, four U.S. states, three cities and one territory have passed laws banning questions about a potential hire's pay history. Massachusetts enacted the first past pay privacy law in August 2016, with similar statutes passing in Oregon, California, Delaware, New York City, San Francisco and Puerto Rico. The Massachusetts, California, Delaware, New York City and San Francisco laws are scheduled to take effect between now and mid-2018. Philadelphia's "Fair Practices Ordinance" was set for spring 2017, but the effective date was postponed pending legal challenges.
While the level of restriction varies depending on jurisdiction, each statute forbids screening applicants on past pay. The Massachusetts law, effective as of July 1, 2018, will require hiring managers to state a compensation figure up front based on a candidate's worth to the company, rather than what he or she made previously.
Starting January 1, it will be illegal for California employers to rely on past salary data as a factor in whether to offer employment to a job applicant. Unlike other past pay laws, the California law requires employers to provide a pay range for the applied-for position.
Though the state's salary privacy bill applies to both men and women, the law's backers believe it will counter the type of pay discrimination that can follow women throughout their careers.
“Women will no longer be asked about their prior salaries,” said Assemblywoman Cristina Garcia, chair of the California Legislative Women's Caucus. “What some people think is a simple question has been a barrier to equal pay.”
Employers should familiarize themselves with past pay privacy laws, as there are some variables regarding how the law may apply to their business. For example, California and New York City employers are expressly allowed to rely on past pay information after a voluntary disclosure from an applicant, while other jurisdictions don't specify as to the legality of utilizing that data in determining compensation.
OPENonline is a trusted source for comprehensive background screenings. For more information, visit our website.