Several states in 2018 enacted laws aimed at closing the gender-based pay gap that continues to persist in the American workplace. These new laws restrict employers’ ability to factor salary history into hiring and compensation decisions based on a recognition that relying on salary history tends to perpetuate the gender-wage gap.
One state, though—Wisconsin—passed a law that runs counter to the trend, expressly permitting employers to solicit salary history information and barring local government entities from passing laws to the contrary. Here is a summary of those measures:
California. A new law has been added to the California Labor Code that prohibits all employers from seeking or relying on salary history information of a job applicant as a factor in determining whether to offer the applicant employment or what salary to offer the applicant. Also, employers will be required, upon reasonable request, to provide the pay scale for the position being applied for. Under the law, employers are allowed to consider salary history information voluntarily disclosed by the applicant (Ch. 688 (A. 168), L. 2017, eff. January 1, 2018).
In addition, an existing law was amended to provide that an employer is not prohibited from asking a job applicant about his or her salary expectation for the position being applied for. And the employer is authorized to make a compensation decision based on an employee’s current salary as long as any wage differential resulting from that decision is justified by one or more specific criteria, including a seniority system or a merit system (Ch. 127 (A. 2282), L. 2018, eff. January 1, 2019).
Connecticut. Employers are prohibited from inquiring or directing a third party to inquire about a prospective employee’s wage and salary history during the job interview process, unless the individual has voluntarily disclosed such information (P.A. 18-8 (H. 5386), L. 2018, eff. January 1, 2019).
Hawaii. Employers and employment agencies are prohibited from requesting or considering a job applicant’s wage or salary history as part of the employment application process or compensation offer. And employers are prohibited from retaliating or discriminating against employees who disclose, discuss, or inquire about their own or coworkers’ wages (Act 108 (S. 2351), L. 2018, eff. January 1, 2019).
New Jersey. Executive Order No. 1 explicitly prohibits state agencies and offices from asking a job applicant for their past wage history or investigating the prior salaries of their applicants. The order took effect on February 1, 2018.
In addition, sweeping equal pay legislation, known as The Diane B. Allen Equal Pay Act, was signed amending the Law Against Discrimination to make it a prohibited employment practice for employers to discriminate against an employee who is a member of a protected class. Employers will not be able to pay rates of compensation, including benefits, less than the rate paid to employees not of the protected class for substantially similar work, when viewed as a composite skill, effort, and responsibility.
The law also prohibits employers from retaliating against employees for discussing their pay with others and provides for three times the monetary damages for a violation. Further, an aggrieved employee may obtain relief for up to six years of back pay, and the law allows courts to award treble damages for violations (Ch. 9 (S. 104), L. 2018, eff. July 1, 2018).
Pennsylvania. Executive Order 2018-18-03—Equal Pay for Employees of the Commonwealth—restricts Commonwealth agencies from inquiring about a job applicant’s current salary or salary history information, except where compensation is based on: (a) a collective bargaining agreement; (b) a seniority system; (c) a system of merit pay increases; (d) a system that measures earnings by quantity or quality of production, sales goals, and incentives. Job postings must clearly disclose a job position’s pay scale and pay range. The Commonwealth must disclose on the employment website that the applicant is not required to furnish current compensation or prior compensation at any stage of the hiring process.
Vermont. Employers are prohibited from asking about prospective employees’ salary history and may not determine whether to interview a prospective employee based on current or past compensation. In addition, employers are prohibited from requiring that a prospective employee’s current or past compensation satisfy minimum or maximum criteria. “Compensation” includes wages, salary, bonuses, benefits, fringe benefits, and equity-based compensation (Act 126 (H. 294), L. 2018, eff. July 1, 2018).
Washington. Discrimination in terms of compensation based on gender is prohibited. Differences in pay may only be the result of such things as seniority, training/education/experience, a merit system, a system that measures earnings by quantity or quality of production, or a bona fide regional difference in compensation levels. In addition, an employer may not limit or deprive career advancement opportunities based on gender. And, employers may not require nondisclosure wages as a condition of employment, or require an employee to sign a waiver or other document that prevents an employee disclosing the amount of the employee’s wages (Ch. 116 (H. 1506), L. 2018, eff. June 7, 2018).
Wisconsin. A new law was enacted allowing employers to solicit salary information of prospective employees. The law also prohibits local government entities (cities, villages, towns, and counties) from enacting ordinances that would prohibit employers from soliciting information regarding the salary history of prospective employees (Act 327 (A. 748), L. 2017, eff. April 18, 2018).
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