There is a growing trend across the country to bar employers from asking job applicants questions about their salary history. The motivation for this trend is to help reduce the ongoing pay disparity that exists between men and women.
Testimony provided to the Maryland Senate Finance Committee by a representative of the National Women’s Law Center reported that when comparing women of all races to men of all races in Maryland, women typically make 84 cents for every dollar made by men.
Moreover, a 2015 study revealed that mothers who work full time year round in Maryland make only 72 cents for every dollar paid to fathers. These disparities are often perpetuated as women move from job to job and are asked what they were paid by their previous employer.
Maryland’s first effort to ban questions about prior salaries was defeated earlier this year. After passing the House by a two-thirds majority, the SB 404 stalled in the Senate. But this is likely not the end of the story.
Since 2000, the Equal Employment Opportunity Commission Compliance Manual has instructed that reliance on prior salary cannot justify a compensation disparity, explaining “permitting prior salary alone as a justification for a compensation disparity ‘would swallow up the rule and inequality in compensation among genders would be perpetuated.’”
Moreover, over the past year, Delaware, Massachusetts, Oregon, Puerto Rico, Philadelphia, New Orleans, San Francisco, and New York City have enacted legislation barring employers from asking applicants about their salary history. This trend is undeniable. If your business operates in multiple states, be aware that it may already be subject to a ban on questions about the applicant’s salary history—check the law in all of the states and cities in which your company operates.
As a state that has long been relatively pro-active on equal pay issues, Maryland is unlikely to buck this trend for long. Be prepared.
What is an employer to do? Rather than asking an applicant what her current salary is, one approach is to value the position based on the work that will be performed, taking into consideration the expected level of income generated by the position, and the level of education required to perform it.
Trying to save a few thousand dollars by matching a prior salary is simply not a good move in today’s climate. The laws currently in effect impose serious sanctions on an employer, such as monetary fines per incident and even jail time.
In light of the growing trend, it would be prudent to go ahead and take the time to think about target salaries for each of your company’s positions, and to train all interviewers to stop asking applicants about their salary history. If you use a written job application form, make sure it does not ask for the applicant’s current salary.
Of course an employee can volunteer prior salary information, and may well do so while negotiating their salary. For example, if your company makes an offer to pay $X, the employee may respond that $X is not high enough, given that they are already making $X + $10,000 in their current position. Additionally, it is still fair game to ask the applicant what her desired salary is.
If you do engage in a conversation like this with a job applicant and she voluntarily tells you her previous salary, make sure the interviewer documents how he or she learned this information and maintains a written record of the conversation.
If you have questions regarding whether interviewers for your company can ask applicants about their prior salary, Astrachan Gunst Thomas, P.C. can help. Please contact Elizabeth Harlan at 410-783-3528 (firstname.lastname@example.org).