Asking Your Applicants About Their Compensation History
We’ve previously addressed the spreading initiatives to prohibit employers from asking or inquiring about the criminal history of applicants before a job offer has been tendered. These are referred to as “Ban the Box” or “Fair Chance to Work” laws.
There is another regulatory initiative that is quickly trending to the norm: prohibiting employers from asking job applicants about their previous salary. These new laws are referred to as “Salary Ban” laws.
The intent of these laws is to end and prevent pay discrimination, especially with gender and race. The reasoning is that some groups have been underpaid and asking about previous salary (which may be much less than what the employer is willing to pay) may perpetuate the imbalance in pay.
There are currently 17 state and 17 local bans. More information on the laws may be found here: https://www.salary.com/resources/guides/salary-history-inquiry-bans/.
Like the Ban the Box laws, there is a lack of consistency with Salary Ban laws and these initiatives can become law quickly. Some Salary Bans prohibit an employer from using an applicant’s history to set compensation even if the information is volunteered. Some prohibit employers from taking disciplinary action against employees who discuss pay with coworkers. Another thing you should review is the word “salary” itself, especially with our increasing gig economy. A better way to think of this is “compensation history.” In other words, if your job opening is an hourly rather than salaried position, we would not dismiss the need to review the “salary” laws that will apply.
We recommend that you review your policies in this area when you speak with applicants and your practices when performing past employment verifications. Aside from the source referenced above, VICTIG has a detailed resource available to you with our State Rules Register, where you may review the state and local prohibitions in the areas that pertain to your operation.
When performing a past employment verification (or having VICTIG perform this service on your behalf) do you ask for the salary at the past employer? Is it allowed? While asking for salary is not something we can control or police (e.g., we don’t know the stage of the hiring process or how many employees you have, etc.) we wanted you to be aware of it so that you could discuss with your legal counsel if needed.