Tag Archives: salary history

NEW LAW: Suffolk County, New York Bans Salary History Inquiries

New York’s Suffolk County recently passed a county ordinance prohibiting employers from inquiring into an applicant’s salary history as a part of the hiring process.

Under this new law, which goes into effect on June 30, 2019, employers are prohibited from

  • Inquiring about a job applicant’s wage or salary history, including but not limited to, compensation and benefits.
    • “to inquire” means to ask an applicant or former employer orally, or in writing, or otherwise or to conduct a search of publicly available records or reports.
  • Relying on the salary history of an applicant for employment in determining the wage or salary amount for such applicant at any stage in the employment process, including at offer or contract.

By passing this new law, Suffolk County becomes the fourth locality in New York State to enact a salary history ban law (joining New York City, Westchester County, and Albany County).  To date, New York State has NOT enacted a statewide salary history ban law.

It is recommended that employers in Suffolk County verify that all employment application materials are updated to remove any requests for salary history – including job applications and job interview scripts.  In addition, all employees who are involved in the hiring process are trained about the new requirement and informed that they are not allowed to inquire into applicant’s salary history.

Employers May Not Rely on Salary History for Current Pay Rate

In a ruling sure to upset some employer’s current pay practices, the Ninth Circuit Court of Appeals ruled that “prior salary alone or in combination with other factors cannot justify a wage differential” between male and female employees. The ruling addressed pay differentials under the federal Equal Pay Act.

The Equal Pay Act

The Equal Pay Act prohibits employers from engaging in sex discriminating by paying an employee at a rate less than the rate at which the employer pays an employee of the opposite sex for equal work on jobs requiring equal skill, effort, and responsibility and which are performed under similar working conditions.

The Act permits pay differentials between male and female employees when done in accordance with one of the following:

  • A seniority system;
  • A merit system;
  • A system which measures earnings by quantity or quality of production; or
  • A differential based on any other factor other than sex.

This recent case addressed a pay differential under this last exception, the catchall provision. Continue reading Employers May Not Rely on Salary History for Current Pay Rate

Washington Expands Equal Pay Protections

In a major revision of the state’s anti-discrimination law, Washington has passed amendments to its Equal Pay Act to address income disparities, employer discrimination and retaliation practices in the state.  The amendment will make it a misdemeanor for an employer to discriminate in providing compensation based on the gender of similarly employed employees.  With an effective date of June 7, 2018, employers should begin preparations to comply with these significant changes in the law.

What the New Law Does

Key amendments to Washington’s Equal Pay law include: Continue reading Washington Expands Equal Pay Protections

Michigan Invalidates Local Ban-the-Box Laws

On March 26, 2018, Michigan passed an amendment to its Local Government Labor Regulatory Limitation Act that prohibits local government bodies from adopting or enforcing any local policy, resolution, or ordinance regulating information an employer or potential employer may ask an applicant for employment verbally or in writing (so called salary history and ban-the-box laws).

This new amendment comes in response to municipalities such as Detroit and Kalamzoo passing ordinances that prohibit employers from making inquiries into applicants’ salary and criminal histories. Such local ordinances will no longer be enforceable once the law takes effect on June 24, 2018.

In spite of this pro-employer development, Michigan employers should continue to exercise caution in the information they request of job applicants.  Both state and federal law place extensive limitations on the questions employers may ask applicants during the hiring process, including prohibitions on inquiries relating to age, disability, height, weight, marital status, family status, gender, ethnicity, and the list goes on.

Addressing Some of the Confusion Regarding California’s New Salary History Ban

California employers – Are you confused about what information you are (and are not) allowed to request under California’s new salary history ban law?  Below are answers to some common questions regarding compliance with these new requirements.

What is the new salary history ban?

California’s salary history ban is set forth in newly created California Labor Code section 432.3. Under this code section, California employers are prohibited from “relying on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.”  In other words, California employers cannot ask job applicants about their salary histories.

Can a job recruiter provide an employer with a candidate’s salary history?

No.  The law expressly prohibits employers from seeking an applicant’s salary history “through an agent,” which would include an outside recruiter.  To protect themselves, employers should take steps to ensure that their recruiters (whether internal or external) are not seeking salary history information from candidates as your company can be held liable for these violations.

Can I ask an applicant what benefits they received from a previous employer?

No.  The law expressly prohibits employers from seeking an applicant’s salary history information, which includes “compensation and benefits.”  This definitely means that employers cannot ask an applicant about the value of a benefit package.  Whether an employer can ask if there are any benefits the applicant would be “losing” by accepting a position with your company is an issue that is yet to be determined.  The law is not clear on the scope of the information a company is prohibited from seeking relating to benefits.

Can I still verify an applicant’s salary history after an offer of employment has been extended?

Yes.  The state law does not prohibit employers from contacting an applicant’s previous employer(s) and verifying salary history after an offer of employment has been made.  However certain localities (like San Francisca) prohibit employers from disclosing the salary history of a current or prior employee to a prospective employer with having first obtained written authorization from the employee.

Am I required to provide applicants with a salary range for a position?

Yes – if the applicant makes a “reasonable request” (either oral or written), the employer is required to provide a “pay scale” for that position to the applicant.  In light of this requirement, it is recommended that employers prepare pay scales for positions for which they are hiring prior to posting open positions.  When explaining this pay scale to applicants, consider explaining to the employee that the salary for the position will be based on factors such as qualifications and experience.  Finally, all requests for a pay scale (and the company’s response to those requests) should be documented.

What if an applicant voluntarily provides his salary history?

The law does not prohibit applicants from “voluntarily and without prompting disclosing salary history information to a prospective employer.”  If this does happen, it is recommended that employers document the voluntary disclosure, but still take steps to ensure that this disclosure is not the sole factor used in determining the individual’s salary if that individual is hired.

NEW LAW: California Passes Salary History Ban

Attention California employers … on October 12, 2017, California Governor Jerry Brown signed AB 168 into law.  In short, this new law amends the California Fair Pay Law by prohibiting all California employers from inquiring into an applicant’s salary history starting January 1, 2018.

Specifically, under the new law, all California employers are required to follow these rules during the hiring process:

  • Employers cannot use (rely on) the salary history information of an applicant when determining whether to offer employment to an applicant or
  • Employers cannot use (rely on) the salary history information of an applicant when determining what salary to offer an applicant.
  • Employers cannot seek salary history information, including compensation and benefits, about an applicant.
  • Upon reasonable request, employers must provide the pay scale for a position to an applicant applying for employment.

It is important to note that the law does not prohibit an applicant from voluntarily disclosing salary history information to a prospective employer. If an applicant voluntarily and, without prompting, discloses salary history information to a prospective employer, the law does not prohibit that employer from considering the voluntarily disclosed salary history information.

Next step for employers

California employers should review this new law and provide training to those people involved in the hiring process about the new requirements, as these new requirements impact the interview process.  In addition, all California employers should review their job applications and verify that any inquiries regarding prior salary history or wage rates are removed from the application before January 1st.

NEW LAW – Oregon’s New Equal Pay Act

Oregon’s Equal Pay Act (House Bill 2005) was recently signed into law. This new law amends the existing Oregon Equal Pay Act is intended to better address equal pay discrepancies among women, minorities, and other protected class employees.

Under the new law, it is unlawful for an employer to:

  1. Discriminate between employees on the basis of a protected class in the payment of wages or other compensation for work of comparable character;
  2. Pay wages or other compensation to any employee at a rate greater than that at which the employer pays to employees of a protected class for work of a comparable character;
  3. Screen job applicants based on current or past compensations; or
  4. Determine compensation for a position based on current or past compensation of a prospective employee.

In addition, the new law also prohibits employers from asking applicants or current employees about their salary history until after the employer makes an offer of employment to the prospective employee that includes an amount of compensation.

Key Terms

The Equal Pay Act defines the following key terms:

  • “Protected class” means a group of persons distinguished by race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age.
  • “Wages” means all compensation for performance of service by an employee for an employer, whether paid by the employer or another person, or paid in cash or any medium other than cash.
  • “Working conditions” includes work environment, hours, time of day, physical surroundings and potential hazards encountered by an employee.
  • “Work of comparable character” means work that requires substantially similar knowledge, skill, effort, responsibility and working conditions in the performance of work, regardless of job description or job title.

Pay Differentials Permissible Under Certain Circumstances

The new law does allow employers to pay employees for work of comparable character at different compensation levels if all of the difference in compensation levels is based on a bona fide factor that is related to the position in question and is based on:

  • A seniority system;
  • A merit system;
  • A system that measures earnings by quantity or quality of production, including piece-rate work;
  • Workplace locations;
  • Travel, if travel is necessary and regular for the employee;
  • Education;
  • Training;
  • Experience; or
  • Any combination of the factors described in this subsection, if the combination of factors accounts for the entire compensation differential.

Notice Requirements

Employers will be required to post a notice of the Equal Pay Act’s requirements. The Bureau of Labor and Industries will be making a template available to employers which meets the statutory requirements.

Timeline for Implementation

While the new law goes into effect on September 1, 2017, only portions of the law go into effect at that time. Specifically, starting in September 2017, the employers will no longer be allowed to seek salary history from applicants or current employees.

On January 1, 2019, most of the Equal Pay Act’s provisions expanding protections go into effect. This includes requiring posted notice and making it unlawful to pay different wages, screen job applicants, or determine compensation based on an applicant’s current or past compensation.

On January 1, 2024, employees will have a right of action against employers that seek an applicant’s or current employee’s salary history.

 

New Jersey Salary History Bill Vetoed By Governor

New Jersey employers can breathe a sigh of relief.  Governor Chris Christie recently vetoed legislation (A3840/S2536) which would have prohibited employers from inquiring about applicants’ salary histories.

Impact on Employers

New Jersey employers are still able to:

  • Inquire about salary history, including compensation and benefits, of a job applicant during the hiring process;
  • Screen a job applicant based on the applicant’s wage history, including by requiring that an applicant’s prior wages, salaries or benefits satisfy any minimum or maximum criteria;
  • Rely on an applicant’s salary to determine a salary amount for the applicant at any stage in the hiring process, including finalizing an employment contract.

 

NEW LAW: Salary History Questions are banned in New York City

The New York City council recently passed a bill (Int No. 1253-A) that, when it goes into effect on Tuesday, October 31, 2017 (180 days after the bill was signed on May 4, 2017), will ban employers from considering a job applicant’s salary history when making hiring decisions (whether to hire the applicant and the salary to pay the applicant).

Specifically, the new ordinance prohibits employers from doing the following:

  • Asking questions relating to a potential employee’s prior salary; and
  • Searching for former salary, benefits, or other compensation information through any publicly available source.

Employers are still permitted to:

  • Consider salary, benefits, and other compensation information if an applicant reveals this information voluntarily and without prompting; and
  • Discuss expectations regarding salary, benefits, or other compensation.

It is recommended that New York City employers review their employment applications and verify that any inquiries about salary history are removed. In addition, any interview question templates should be reviewed and questions relating to salary history should be removed. Finally, all employees who participate in interviews should be trained not to inquire about salary history.

NEW LAW – Oregon Prohibits Past Salary History Inquiries

On June 1, 2017, Oregon Governor Kate Brown signed House Bill 2005 (Oregon Equal Pay Act) into law. This new law is intended to address the gender pay gap by prohibiting employers from asking job applicants about their salary history. It also expands the protections for employees already provided under federal and state law.

Specifically, this new law prohibits an employer from discriminating in any manner “between employees on the basis of a protected class in the payment of wages or other compensation for work of comparable character.”  This includes paying “wages or other compensation to any employee at a rate greater than that at which the employer pays wages or other compensation to employees of a protected class for work of comparable character.”

Most importantly, under this new law, employers are prohibited from:

  • Asking an applicant how much he/she is currently paid;
  • Basing a new hire’s pay on that individual’s current or past compensation; and
  • Complying with the Equal Pay Act by cutting a current employee’s pay.

The new law, does not, however, prohibit employers from paying employees for work of comparable character at different compensation levels if the difference in pay is due to a bona fide factor related to the position based on one of the following:

  • a seniority system;
  • a merit system;
  • a system measuring earnings by quantity or quality of production (e.g., piece-rate work);
  • workplace locations;
  • travel (if necessary and regular for employees);
  • education;
  • training; or
  • experience.

This new law goes into effect on January 1, 2019. It is recommended that Oregon employers review the provisions of the new law and verify that their application process does not include prior salary inquiries. In addition, Oregon employers should review their current pay practices and address any existing pay disparities.