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ASKING ABOUT SALARY HISTORY COULD SOON BE ILLEGAL

It has long been customary for employers to gain salary history from job applicants to help determine an applicant’s qualifications for a position.   Some employers have requested W-2 forms have in order to gain an accurate picture of an employee’s background and determine if an applicant’s salary history is in line with is being offered. Federal laws do not prohibit requesting the information, however, some states and cities have already taken steps to outlaw employers from requesting salary history.

With the objective of pushing to fight wage discrimination and the gender pay gap, a bill was recently introduced in Congress that would ban salary questions across ALL states.  The bill forces employers to develop salary offers based on job requirements and market pay levels rather than an applicant’s current salary or salary history, which may be lower than current market rates for some individuals’ skill and experience.

The following cities and states have banned salary questions by public and/or private employers:  (*Effective Date; E.D.)

  • California – (E.D. Jan 2018); banned private and public employers from asking about pay history
  • Delaware – (E.D. Dec 2017); banned ALL employers from asking salary history
  • Massachusetts – (E.D. Jul 2018); prohibits ALL employers from inquiring about pay history
  • New Orleans – (E.D. Jan 2017); banned inquiries from city departments and employees of contractors who work for the city
  • New York City – (E.D. Oct 31, 2017); banned public and private employees from asking salary history
  • Oregon – (E.D. Jan 2019); will ban ALL employers from inquiring about salary history
  • Philadelphia – (E.D. was May 23, 2017—on hold) bans ALL employers from asking salary history; halted from going into effect by Chamber of Commerce; still pending
  • Pittsburgh – (E.D. Jan 30, 2017); Bans only city agencies from asking candidates’ pay history
  • Puerto Rico – (E.D. Mar 2018); bans employers from inquiring about pay history

When an employer ceases to rely on salary history of an applicant, it requires making a clear, market-based case for pay, the challenge falls on the employer.  It will be important to create a salary range for each position and ensure that the variations within those ranges are based on things like merit, education, and experience. Some companies welcome a strictly market-based approach to making salary offers as it has the ability to foster greater transparency.  Whether or not your jurisdiction is covered by the new laws, the trend is increasing and may soon impact your organization.

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

This entry was posted on Wednesday, February 14th, 2018 at 2:23 PM and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.