What You Need To Know About Salary History Bans Across The US

Compliance   |   

Do you tie your job offers to salary history? If so, you’re not alone. But you’ll need to come up with a new approach soon. 

San Francisco recently joined New York City, Philadelphia, Washington, DC, and Massachusetts, Delaware, and Oregon in banning employers from asking job candidates how much they earned in previous roles.

RELATED: Background check laws changed in California in July 2017.  Find out what to do today.

Don't Ask, Don't Consider, Don't Tell

San Francisco’s "Parity In Pay" ordinance takes effect July 1, 2018. Employers will face penalties of $100 to $500 per offense starting July 1, 2019.

 Under the new law, employers will have to stop three common hiring practices:

  • Asking candidates (whether in person or on a job application or other form) about their former salaries
  • Considering salary history in deciding whether to hire or how much to pay a candidate
  • Disclosing a current or former employee’s salary without specific written authorization 

How Salary History Affects Equal Pay

California passed a Fair Pay Act way back in 1949 (and passed updates to it in 2015). Yet, according to U.S. Census data, women in San Francisco earn 84 cents for every dollar their male counterparts earn. Black women earn only 60 cents for every dollar, and Latina women only 55 cents.

Will banning salary questions help? The bans are new – most haven’t taken effect yet – so the outcome remains uncertain. But the goal is to prevent inequities from following women throughout their career. 

Say a woman earns less than a man for similar work at a job early in her career. That inequitable salary could echo into her future roles if wage determines or influence her salary offers.

In introducing federal legislation that would prevent employers from asking about salary history, Rep. Eleanor Holmes Norton had this to say:

“Our bill will help reduce the wage gap by requiring employers to offer salaries to prospective employees based on merit, not gender, race, or ethnicity."

How To Adjust To The Parity In Pay Law

In a recent Lexology post, Ogletree Deakins attorneys suggest these next steps for employers in San Francisco: 
  • Review hiring documentation and practices to address salary inquiries. 
  • Train hiring managers and interviewers to avoid salary inquiries and to respond appropriately to employment verification requests that seek salary information.
  • Pay attention to changing pay equity laws.

Salary History And Background Checks

Many business include employment verification when they run background checks on new hires and job candidates. Often, that verification reports past salary levels.

If you’re in one of the cities or states with salary history bans, make sure to review your screening policy with your legal advisors.  

You might also want to seek out a background check provider with a commitment to compliance that goes beyond the FCRA.

Download The Ultimate Guide to Background Check Compliance

Kim Moutsos

Kim Moutsos

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Editor in chief of the GoodHire blog The Works, Kim Moutsos seeks out the latest advice on hiring, compliance, background checks, and the future of work. When she’s not reading, writing, or wrangling other writers, she’s likely on one of her daily runs (over 777 consecutive and counting).

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