Salary History Bans
As more local and state governments enact new laws to prohibit employers from requesting salary history information from job applicants, many employers have had to revise their hiring policies and practices to bring them into legal compliances. Until recently, requesting an applicant’s salary history was a standard practice for many employers in their hiring process. However, with current legislative trends toward equal pay, bans against gender pay disparity, and prohibiting use of salary history as a basis in applicant screening and job compensation are causing employers to reconsider their hiring policies and practices in light of future legal requirements.
Past salary history information could be used as a screening tool to eliminate applicants from a hiring pool as being over-qualified or under-qualified compared to a budgeted job salary range. Some employers have used an applicant’s past salary information as the basis to set the compensation for the open job position. This can contribute to the gender pay inequity between male and female applicants and minority applicants. Equal Pay Laws have been enacted in many states similar in nature to the federal Equal Pay Act to prohibit pay discrimination.
Salary history bans can apply to all employers, private and public, state agencies, city and county agencies and departments, employment agencies, or employers’ agents, or others as specified in the state, city, or county laws. In general a salary history ban prohibits employers from asking about current or past salary history from an applicant, the applicant’s current or former employer, an agent of the applicant’s current or former employer or other sources for the purposes of obtaining salary history information. In some jurisdictions an employer may be prohibited from searching public records or public reports for the purpose of obtaining an applicant’s current or past compensation information.
Some employers have revised their hiring policies and practices to be more transparent to job seekers. By posting job descriptions, hiring criteria, and salary ranges for open job positions, the employer provides potential applicants the opportunity to determine the level of experience and expertise required for the job. Potential applicants can self-assess their qualifications and salary expectations relative to job requirements before deciding to apply.
Employers in those locations with salary history bans should review and revise hiring policies, practices, and procedures to ensure compliance with the specific law governing their location. Provisions and prohibitions by law must be incorporated into the employer’s hiring policies and practices, recruitment, the interview process, and the screening process. All job applications, whether in printed form or available online, and other types of hiring documents must be reviewed and revised to ensure those documents do not contain any requests for applicants to disclose their salary histories during the hiring process. Recruiters and hiring managers must receive education and training on compliance issues to identify questions they can ask and questions that cannot be asked during prospect and applicant interviews and applicant screening. Hiring personnel must ensure they are not asking or prompting an applicant to disclose salary history information. The focus of the employer’s hiring procedures should be to hire a qualified applicant with requisite skills, education, and experience. Salary ranges should be commensurate with experience and skills.
In general an employer can provide an applicant with information about the salary and other benefits offered in relation to the open job position. In some jurisdictions an employer can ask the applicant his salary expectations to determine whether the applicant’s expectations are within the offering salary range of the open position. An employer should not use the applicant’s salary expectations to determine whether to offer employment or as basis to set compensation. The information cannot be used to offer a lower salary to an applicant.
What should an employer do if the applicant volunteers his salary history? It may depend upon the state, city or county applicable law. In general an employer cannot rely on the applicant’s stated pay history and should refocus attention on the job requirements and applicant qualifications. It may be advisable for employers to include disclosure in their hiring policies and practices and during interviews that the employer does not rely on information about an applicant’s current or past salary or compensation in the employer’s decision for employment or in future compensation decisions.
In some jurisdictions the employer may ask an applicant about salary history but only after an offer of employment is made. However a better practice may be to avoid collecting such information in order to avoid potential claims in the future that the employer relied upon the information to set compensation.
The following state and local laws are examples of some current state and city salary history bans. Employers should always research applicable laws for their location and determine specific requirements.
State Salary History Bans
Illinois
Illinois’ Salary History Ban prohibits employers from screening job applicants based on their current or prior wages, salary, benefits, or other compensation. Employers are prohibited from requesting or requiring applicants or their current or former employer disclose information about the applicant’s salary history as a condition of being interviewed, considered for employment, offered employment, or offered compensation.
An employer is not prohibited from providing an applicant with information about compensation, salary or benefits offered in relation to the open job positon. An employer can discuss with the applicant the applicant’s expectations in respect to compensation, salary, and benefits for the position. If an applicant voluntarily discloses current or past salary, compensation or benefits, an employer may not consider that information when making an employment decision or a decision on compensation.
Washington
Washington amended the Equal Pay and Opportunities Act to prohibit employers from inquiring about an applicant’s salary history. Washington state law prohibits all employers from seeking the wage or salary history of an applicant for employment, either directly from the applicant or from a current or former employer, and requiring that an applicant’s prior wage or salary history meet certain criteria. Employers can confirm an applicant’s wage or salary history only if the applicant has voluntarily disclosed his wage or salary history or if the employer has already negotiated and made an offer of employment to the applicant that includes an offer of compensation.
City Salary History Bans
Kansas City MO
Kansas City employers are prohibited from asking job applicants about their salary history information, including prior compensation and benefits. The ordinance prohibits an employer from inquiring about a job applicant’s salary history or screening job applicants based on their current or prior wages or other benefits. Employers are prohibited from relying on an applicant’s salary history in deciding whether to offer the applicant employment or in determining the applicant’s salary, benefits or other compensation during the hiring process or negotiation of an employment contract.
Employers are required to remove salary questions from any hiring forms, such as job applications, online applications, candidate questionnaires and background check forms; update their interview and negotiation policies and procedures; and train hiring managers, recruiters and interviewers on the legal requirements.
The law applies to all conversations between interviewers and applicants. Employers can discuss an applicant’s salary expectations, but interviewers should be aware of legal restrictions. Asking about salary expectations in such a way that is intended to solicit salary history information or pressures an applicant to disclose such information could violate the ordinance’s requirements.
Cincinnati OH
Cincinnati’s ordinance prohibits employers from screening applicants based on wages, relying on salary history for hiring decisions, or refusing to hire an applicant who does not provide his salary history. Asking job applicants about their salary history or current earnings is an illegal discriminatory practice for city employers.
Job applicants in Cincinnati must be offered employment and compensation based on job responsibilities and level of experience rather than on salary history.
Atlanta GA
The city of Atlanta will not ask for salary history on its employment applications, in applicant interviews, or in employment screenings.