Maryland Salary History Ban Takes Effect October 1 to Reduce Gender Pay Gap

Regulations

Written By ESR News Blog Editor Thomas Ahearn

On October 1, 2020, Maryland House Bill 123 (HB 123) will take effect and prohibit employers in the state from requesting or relying on the salary history of job applicants to make decisions about employment or initial pay in most circumstances, and require an employer to provide an applicant the wage range for the job if requested.

HB 123 amends the Maryland Equal Pay for Equal Work (EWEW) law and its requirements will apply to private, state, and local government employers in Maryland, add to existing provisions that set nondiscrimination and equal pay standards, and prohibit employers from requiring employees to keep pay information confidential.

Under HB 123, employers may not seek salary history information from an applicant or applicant’s current or former employers, and may not rely on salary history in screening applicants, considering applicants for jobs, or setting initial pay. However, employers making job offers may use salary history voluntarily given by applicants.

HB 123 also requires employers to give job applicants “the wage range for the position for which the applicant applied” upon request the law does not define “wage range” and does not explain the steps employers need to take to comply with the law if they do not have pre-determined wage ranges for every job classification.

Violations of the wage history and wage notice requirements of HB 123 are subject to civil penalties of up to $300 for each applicant for whom the employer is not in compliance, and up to $600 for each subsequent violation. Other violations of the EWEW are subject to damages and injunctive relief. The text of HR 123 is available here.

According to the National Committee on Pay Equity (NCPE), the gender pay gap has narrowed by less than one-half a penny per year in the United States since the Equal Pay Act (EPA) of 1963 was passed. In addition, women earned 80 percent of what men earned in 2015, statistics from the U.S. Census Bureau revealed.

As a result, laws prohibiting employers from asking about salary history have increased to close the gender pay gap. As of September 2020, salary history bans exist in cities such as Atlanta, Chicago, Cincinnati, Kansas City, Louisville, New Orleans, New York City, Philadelphia, Pittsburgh, Salt Lake City, San Francisco, and St. Louis.

In addition, Alabama, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Vermont, Virginia, Washington, and Wisconsin have passed statewide laws. HRDive keeps a list of states and localities that have salary history bans.

The U.S. Equal Employment Opportunity Commission (EEOC) has settled several equal pay discrimination lawsuits with businesses and this will cause employers to focus more on salary history question bans, according to the “ESR Top Ten Background Check Trends” for 2020 compiled by Employment Screening Resources® (ESR).

“When an employer has a background screening firm perform past employment verifications, it is critical that the firm knows which cities, counties, and states prohibit salary history questions, or else that employer could be fined,” explained Attorney Lester Rosen, founder and CEO of Employment Screening Resources® (ESR).

Founded by Rosen in 1997, Employment Screening Resources® (ESR) – a leading global provider of background checks – offers three levels of past employment verifications that comply with state and local salary history bans so employers may avoid EEOC equal pay lawsuits. To learn more about ESR, visit www.esrcheck.com.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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