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Salary History Bans Pick up Steam

Can employers still ask about salary history? Not long ago, it was common for employers to request salary information as part of a job application alongside other employment history information, such as employer names, job titles, employment dates, and other details. Now, salary history bans are picking up steam across the employment landscape.

In recent years, several states and jurisdictions have passed new laws that prohibit employers from asking job candidates about their salary history. Maryland legislators earlier this year voted to pass a law that makes it illegal for employers to request an applicant’s pay history or make any employment or salary offer decisions based off such pay history. The only exception is if a candidate voluntarily provides details about previous salaries during the job offer and negotiation stage, and the employer can only use this information to offer a salary higher than the initial offer. The Maryland law goes into effect on October 1.

Maryland is not the first state to take this kind of legislative step. According to Salary.com, there are at least 17 states and 17 local governments that restrict or ban employers from asking about salary histories.

Many of these laws are recent. New York and New Jersey’s salary history bans both went into effect in January. Similar policies in Illinois, Maine, and Alabama have been enforceable since last September. The first salary history ban law in New Orleans has only been in effect since January 2017.

Two states, Michigan and Wisconsin, have laws that prohibit local governments from establishing ordinances that would bar employers from soliciting candidate wage histories.

While it is common for employers to request salary information as part of the process of gathering details about employment history, the practice has come under fire with critics claiming that it helps to reinforce pay disparities. The common criticism is that obtaining salary history as part of the job application process or employee background checks can give employers a reason to pay someone less for a job than the position is worth.

Particularly for women, minorities, LGBTQ+ employees, and other persons who have historically earned less than their white cishet male counterparts for the same work, salary history questionnaires can become a tool for pay discrimination. These criticisms have been brought to light within the United States Department of Justice, where half a dozen employee associations are urging department leaders to eliminate the practice of asking candidates for their salary history.

Recent data suggests that salary history bans can positively impact employee salaries. In June, Boston University published a study of areas that had adopted salary history bans. According to the research, workers who changed jobs in cities or states where salary history bans had gone into effect saw their pay increase an average of five percent in the following 12 months. Some groups saw even bigger increases, including female job changers (eight percent) and African-Americans (13 percent). Boston University researchers concluded that “salary histories appear to account for much of the persistence of residual wage gaps.”

It’s not just cities or states implementing these policies. While legislation creates the biggest impact, some employers have adopted their own resolutions to stop asking for wage history. According to a WorldatWork survey, 35 percent of employers banned salary history because of local or state laws, while another 37 percent of employers put their own bans in place. Only 27 percent of respondents don’t bar their interviewers from asking about salaries as part of a candidate’s employment history profile.

At backgroundchecks.com, we offer an employment verification background check that employers can use to confirm the work history information that a candidate provides on a job application or resume. These employee background checks do not include salary history but focus instead on job titles and responsibilities, dates of employment, reasons for leaving, and eligibility for rehire. Employers can use our work history verifications without worrying about compliance problems regarding salary history bans.

Michael Klazema

About Michael Klazema The author

Michael Klazema is Chief Marketing Technologist at EY-VODW.com and has over two decades of experience in digital consulting, online product management, and technology innovation. He is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments.

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