New Laws Prohibiting Salary History Questions Largely Unnecessary, but Likely to Continue
In the past 18 months, numerous states and localities throughout the country have passed laws prohibiting (or limiting) questions employers may ask job applicants about their salary history during the pre-hiring phase.
Generally, the premise of these laws is that these questions having the effect of “anchoring” a candidate’s salary prospects at a lower level or range and, in so doing, perpetuate the impact of salary decisions that were made (or may have been made) for a discriminatory reason.
By all accounts, these laws appear unnecessary, as there are various federal, state, and local laws prohibiting consideration of unlawfully protected characteristics (i.e., race, gender, etc.) as a basis for calculating salary or making a compensation decision. That said, the trend in terms of states and localities enacting legislation to prohibit inquiries about salary history seems likely to continue.
Employers, in order to attempt to insulate or, as the case may be, defeat assertions that they have impermissibly considered salary history as a basis for making an employment decision should note the following:
- Do not request an applicant’s salary history on job application forms.
- Do not attempt to verify an applicant’s salary history through references or other external resources (such as IRS records) except in the very limited circumstances authorized by applicable statutes.
- Train managers and other hiring personnel that they should not ask about an individual’s salary history at any point during the hiring process.
- If an attempt to verify an applicant’s non-salary related information or conduct a background check results in disclosure of the applicant’s salary history, the employer should not rely upon the salary history information either in negotiating with the applicant or in establishing the salary, benefits, and other compensation of the applicant.
- If an employer uses a staffing company or search firm, ensure that the vendor (which may be regarded as the employer’s agent) does not ask about an applicant’s salary history during any aspect of the applicant/interviewing process.
- To the extent practicable, if an employer uses outside vendors to conduct background checks, attempt to eliminate from any background check searches that seek information about and/or reveal the applicant’s salary history.
- Use publicly available and other objective information in creating salary and compensation bands or ranges.
- Make sure there are legitimate business reasons (i.e., market factors, education and experience requirements, etc.) that justify the determination of salaries and other compensation.
- Apply salary and compensation policies and guidelines consistently.
- Regularly review pay and compensation guidelines and practices.
Marc Engel is an employment attorney committed to proactively helping for profit and nonprofit employers to minimize the risk of employment claims; establish sound and effective employment documents and policies; and resolve local, state, and federal workplace disputes throughout the Washington, DC area. For more information on employers inquiring about salary history, contact Marc at 301-657-0184 or email@example.com.