Laws Prohibiting Salary History Questions Will Increase as Gender Pay Equity Movement Grows in 2019

Written By ESR News Blog Editor Thomas Ahearn

Laws prohibiting employers from seeking salary history information about job applicants will increase in the United States as the pay equity movement to narrow the gender wage gap between women and men grows in 2019. This trend has been chosen by global background check provider Employment Screening Resources® (ESR) as fifth on the list of “ESR Top Ten Background Check Trends” for 2019.

Statistics from the U.S. Census Bureau show that women earned 80 percent of what men earned in 2015. The gender wage gap between men and women has narrowed by less than one-half a penny per year in the United States since 1963, when Congress passed the Equal Pay Act, the first law aimed at prohibiting gender-based pay discrimination, according to the National Committee on Pay Equity.

As a result, states, counties, and cities passed restrictions on salary history questions. The idea is that if new pay is based upon previous pay, then gender pay gaps are perpetuated. The goal of such laws is to base compensation on the work performed and not on reliance on previous pay that may reflect gender discrimination, according to ESR founder and Chief Executive Officer (CEO) Attorney Lester Rosen.

Rosen says some salary history laws require an employer to provide the pay scale for a position to an applicant upon reasonable request to encourage employers to prepare pay scales instead of relying on past salary. An employer can still ask what an applicant expects to receive, and obtain objective and quantifiable measures of past job performance such as meeting sales or production quotas.

In response to these laws, employers should modify job applications to prevent past salary inquires and train hiring managers so illegal questions are not asked in interviews. When an employer has a screening firm perform past employment verifications, it is critical that firm knows which states and cities prohibit such questions as well as software that helps facilities compliance or else that employer could be fined.

The number of laws prohibiting salary history questions is growing. In 2018 alone, Hawaii prohibited employers from asking job applicants about salary history, California clarified its law prohibiting salary history questions, Kansas City, Missouri removed the salary history question from applications for city jobs, and New Jersey passed the “historic” and “sweeping” Equal Pay Act that took effect July 1, 2018.

Employers also need to deal with local salary prohibition laws as well. For example, in October 2017, California passed Assembly Bill 168 (AB 168) which prohibits employers in the state from seeking salary history information about job applicants. However, in July 2017, San Francisco Mayor Ed Lee signed the “Parity in Pay Ordinance” to prohibit employers in the city from asking applicants about salary history.

The U.S. Equal Employment Opportunity Commission (EEOC) – which enforces federal laws prohibiting employment discrimination – is actively involved in pay discrimination matters. In October 2018, Denton County in Texas agreed to pay $115,000 to a female doctor after a federal court ruled in a lawsuit filed by the EEOC over violations of the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964.

In August 2018, the EEOC filed a lawsuit that claimed a Kansas school district violated the Equal Pay Act of 1963 by paying women and men unequally for doing a job with the same required skill, effort, responsibility, and working conditions. The EEOC lawsuit stated a woman was hired to be the principal in 2015 and was paid less salary than both her male predecessor and her male replacement.

The Equal Pay Act – a part of the Fair Labor Standards Act (FLSA) of 1938 that is administered and enforced by the EEOC – prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions. To learn more, visit https://www.eeoc.gov/laws/statutes/epa.cfm.

In April 2018, the 9th U.S. Circuit Court of Appeals ruled employers cannot pay women less than men for the same work based on their salary history in order to “capitalize on the persistence of the wage gap.” The case of a woman suing after discovering her salary was less than a male co-worker with the same job but less education and experience “could impact how women are paid in California and beyond.”

The decision overturned a 2017 ruling where the 9th Circuit Court agreed that using salary history when calculating a new salary is allowed under the Equal Pay Act of 1963: “The question before us is also simple: can an employer justify a wage differential between male and female employees by relying on prior salary? Based on the text, history, and purpose of the Equal Pay Act, the answer is clear: No.”

Employment Screening Resources® (ESR) – a leading global background check firm – performs primary source verification of current and previous employment that provides confirmation of position held, beginning and end dates, and the rate of pay only if permissible under current state and local salary history laws. To learn more, visit www.esrcheck.com/Background-Checks/Verifications-References/.

Starting in 2008, Employment Screening Resources® (ESR) has selected background check trends that have impacted the future of the background screening industry. Each trend will be revealed on the ESR News Blog and also listed on the “ESR Top Ten Background Check Trends” web page which is available at www.esrcheck.com/Tools-Resources/ESR-Top-Ten-Background-Check-Trends/.

Employment Screening Resources® (ESR) is accredited by the National Association of Professional Background Screeners (NAPBS), undergoes annual SOC 2® Type 2 audits, was named to 2018 HRO Today Magazine Baker’s Dozen for Top Pre-Employment Screening Service, and won the 2018 HRO Today Tektonic Award for innovative and disruptive background screening technology. To learn more, visit www.esrcheck.com.

ESR Webinar on Top Ten Background Check Trends for 2019

ESR founder and CEO Attorney Lester Rosen – a noted background check expert and author of “The Safe Hiring Manual” – will also host a live complimentary webinar entitled “ESR Top Ten Background Check Trends for 2019” that will take place on Wednesday, January 30, 2019, from 11:00 AM to 12:00 PM Noon Pacific Time. To register, visit https://register.gotowebinar.com/register/5840930517922184451.

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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