As the recruitment industry evolves, staying compliant with the latest legislative updates remains a high priority. Inquiring about a candidate’s salary history has become a growing topic of discussion and jurisdictions throughout the country have made significant changes to prohibit employers from having the ability to request this information. Several jurisdictions have recently passed laws prohibiting employers from inquiring about, or relying upon, a job applicant’s salary history in their hiring practices. The goals of these laws are to increase pay equity and ensure applicants are paid in accordance with the job they are being offered, rather than based on their previous pay.
Which employers are affected?
In New York City, these changes will impact employers with four or more workers. Whereas in the state of Massachusetts, the law applies to employers, defined as any person acting in the interest of an employer directly or indirectly. In Philadelphia, the new law applies to employers doing business in the City of Philadelphia through employees, or who employ one or more workers.
When do the changes take effect?
New York City’s salary history law takes effect October 31, 2017 and Massachusetts’ “Pay Equity” law will go into effect July 1, 2018. Philadelphia’s “Wage Equity” law was scheduled to go into effect May 23, 2017, but this has been postponed. Employers impacted by the Philadelphia law may still want to review their hiring practices and plan for any changes that may be necessary when it takes effect.
New York City
- Employers may, without inquiring about salary history, engage in a discussion with the applicant about their compensation expectations. If an applicant voluntarily discloses salary history without prompting, the employer may consider this information in determining compensation and may verify their salary history.
- Exceptions to Massachusetts’ prohibitions include, but are not limited to:
- A candidate may provide written authorization to a prospective employer to confirm prior wages only after the job offer with compensation have been made to the candidate.
- Variations in wages shall not be prohibited if based upon certain factors outlined in the law, such as “a bona fide merit system,” “geographic location in which a job is performed,” or “education, training or experience to the extent they are reasonably related…”
- The law does not apply to any actions taken pursuant to any federal, state or local law that specifically authorizes the disclosure or verification of wage history for employment purposes.
As an employer, you may have obligations under these laws that may impact your organization and your current processes. We always recommend you discuss changing legislation with your legal counsel to ensure you understand your responsibilities and what processes you may need to modify.
*The information provided above is strictly for educational purposes. It is not intended to be legal advice, either expressed or implied. Accurate Background recommends that you consult with your legal counsel regarding all employment regulations.