The Maryland legislature has joined approximately 25 other state and local jurisdictions in restricting employer use of applicant pay history to determine future pay if the applicant is hired for a position. Instead, Maryland employers must set pay ranges for open positions based on job-specific criteria, without regard to an applicant’s prior earnings.
Specifically, Maryland employers are prohibited from requesting that applicants provide prior pay information. In addition, employers cannot rely on prior pay information voluntarily provided by job applicants except in one narrow exception: when the applicant seeks to negotiate a higher wage than the one offered by the employer.
In that situation, the employer can seek to confirm an applicant’s prior pay and also rely on wage history voluntarily provided by the applicant in order to support the employer making an offer higher than the one initially provided. However, the employer can only make this higher offer if it does not create an unlawful pay differential in violation of Maryland’s equal pay law.
There is no prohibition on an applicant voluntarily disclosing prior pay information. In addition, Maryland employers may still request that an applicant provide a desired pay range if hired for the position.
The law also requires that Maryland employers provide an applicant with the wage range for an open position when the applicant makes such a request.
The goal of this legislation is to ensure that compensation is based on the criteria that is important for the job, such as qualifications, market factors, and the job duties themselves, and end the pay disparities in wages paid to women and minorities.
As a result of this new law, Maryland employers should:
- Review their job applications to ensure that the application does not request prior compensation information;
- Train recruiters, managers, and others involved in the hiring process not to request prior pay information of applicants; and
- Revise policies and procedures so that prior pay information is no longer disclosed when responding to requests for employment verification and reference checks either entirely or from employers in Maryland or one of the other jurisdictions prohibiting such an inquiry.