On July 23, 2016, Massachusetts passed the Act to Establish Pay Equity, which will go into effect on July 1, 2018. The act is intended to help close the gender gap in salaries and prohibits an employer from: (1) evaluating an applicant based on his or her salary history; (2) asking a job applicant about his or her current or prior salary; (3) asking for information about an applicant’s wage history from the applicant’s current or former employer, unless the applicant has already received an employment offer with salary information and the applicant gives written consent to the inquiry; or (4) retaliating against any employee for opposing any practice that the act prohibits.
Philadelphia was the first city in the United States to prohibit employers from asking about an applicant’s prior salary. This legislation, the Wage Equity Law, would bar employers from either asking about an applicant’s salary history or from retaliating against an applicant who refuses to provide salary history information. An applicant may still, however, choose to volunteer his or her salary history. Philadelphia Mayor Jim Kenney signed the bill banning these inquiries on Jan. 23, 2017. The new law, which would have gone into effect on May 23, 2017, has been temporarily stayed pending a lawsuit filed by the Chamber of Commerce for Greater Philadelphia, which characterizes the law as an anti-business impediment.
On May 4, 2017, New York City Mayor Bill de Blasio signed legislation amending the New York City Human Rights Law. The new law bars an employer from: (1) asking questions relating to a potential employee’s prior salary and (2) searching for former salary, benefits or other compensation information through any publicly available source. Even under the new bill, however, a potential employer is allowed to: (1) consider salary, benefits and other compensation information if an applicant reveals this information voluntarily and without prompting, and (2) discuss expectations regarding salary, benefits or other compensation. Penalties include a fine of up to $125,000 for an unintentional violation of the law and a fine of up to $250,000 for a “willful, wanton or malicious” violation. If a potential employee brings a civil lawsuit, then he or she will be eligible for back pay, compensatory damages and attorneys’ fees. The new law goes into effect as of Oct. 31, 2017.
What Does this Mean for Employers?
Be Proactive: Employers should start proactively reviewing their policies and procedures now to eliminate any questions regarding salary history. In fact, the policies and procedures, personnel handbooks, or employee handbooks should ideally instruct the human resources department and any other employees who participate in the hiring process not to ask about prior salaries of applicants. Similarly, any job applications and any related forms should also be revised to omit any questions about prior wages.
Training: Employers should ensure that their human resources department and any recruiters or employees who conduct interviews know not to raise the subject of an applicant’s current or former salary, benefits or other compensation. Asking about someone’s salary can seem second nature during an interview, so human resources and any employees who conduct interviews should especially guard against this.
What to do With the Information: But what if a job applicant volunteers his or her salary information? Even if prior or current salary information is given voluntarily, employers should remain cautious about how they use this information. To keep from running afoul of the federal Equal Pay Act (EPA), employers should be careful to pay employees the same salary for doing the same job or to only permit pay discrepancies based on the reasons permitted by the EPA. For example, an employer may have a pay difference based on performance or seniority. Pay should not, however, simply be based on what the applicant made at his or her prior job.
For many employers it may seem like second nature to ask about an applicant’s salary history. Therefore, it is important for employers to prepare for these upcoming changes now — by reviewing and revising their policies and training their employees on the importance of not making salary inquiries of job applicants.
Republished with permission. The article, "Employers Beware: What Not To Ask During A Job Interview" first appeared in Law360 on May 31, 2017.