Salary history questions may be prohibited in the USA

A new law recently enacted in New York City prohibits private and public employers from asking about an applicant’s salary and benefits history during the hiring process. The law, which comes into effect on October 31, 2017, also prohibits prospective employers from contacting the current and former employers of the applicant to ask about his/her salary and benefits history. The new law also specifically addresses concerns about how salary history information could be obtained by other means. For instance, prospective employers are prohibited from searching any salary history information in public records and, if the information is disclosed through the course of a background check to verify information other than salary history, the prospective employer cannot rely on the disclosed information when making salary determinations. However, there are a few exceptions to this prohibition on salary inquiries:

• if the applicant voluntarily discloses his/her salary history,
• when another federal, state or local law specifically authorizes salary history verification or disclosure,
• when internal transfers or promotions within a current employer are involved, and
• in the case of employees whose salary determinations are made through collective bargaining agreements.

States have also begun enacting legislation that affects salary history inquiries. Massachusetts, California and Oregon have passed similar legislation to the New York City ordinance, while several other states are currently considering adopting similar measures, including Illinois, New Jersey and Texas.

Supporters of the prohibition on salary history questions have argued that these questions perpetuate a wage gap among minorities and the new laws prohibiting such questions will stop employers from discriminating against employees based on their salary history going forward. We expect this trend to continue as more states and cities begin to propose similar legislation.