In many industries, it is common practice for employers to ask job candidates about their salary history. The logic of these questions is often to get a sense of how past employers valued a candidate, how senior candidates were in their organizations—and of course, how much an employer should offer to pay. These questions can be risky for employees for many reasons, especially because employees may be constrained to receiving only a little bit more than their prior salary—regardless of differences between positions or organizations. In addition, this practice can perpetuate historic discriminatory pay gaps among women and people of color.
In an effort to reduce the pay gap and prevent discrimination, more and more cities and states are enacting laws that forbid most employers from asking about salary history at various stages of hiring—including New York City, New Orleans, Massachusetts, California, Delaware, and Oregon. The idea is that employers will be less likely to unintentionally maintain inequitable salary gaps if they do not know the salary history of their employees.
The laws are not identical in all jurisdictions. For example, in California and Massachusetts, employers may be required to provide a pay scale for open positions. States and cities differ as to whether, and when, employers can ask a candidate’s previous employers about a candidate’s past salary. There may be special rules as to temporary employees, public sector or union employees, and internal transfers and promotions. A majority of these laws are extremely recent, going into effect between 2017 and 2019. More laws are pending in legislatures or are currently being examined in courts.
In New York City, violations of the law are punishable by a fine of up to $250,000 plus compensatory damages. On the other hand, some states have a grace period after the law becomes effective, during which employers may not be sued or may not be sued for the full extent of damages.
If you are concerned about salary history inquiries or other types of discrimination, the attorneys at Pelton Graham are ready to discuss your situation.