Did you know that a growing number of states are enacting laws that address pay equity by prohibiting employers from asking job applicants how much they earned in previous jobs? Delaware and Oregon are the most recent states to enact measures, but first: a brief history!
Recent Laws & Bans
The basic idea behind salary history laws is that pay inequality can follow employees from job to job. If a worker experiences pay discrimination over the course of his or her career, disclosing past salary details could put them at a disadvantage when negotiating subsequent salaries or compensation packages. This has the potential to reduce a person’s earning power across his or her entire career.
Enter laws enacting bans on salary history inquiries. Massachusetts, New York City, Philadelphia, and Puerto Rico have already passed restrictions like this. San Francisco is set to pass similar measures after approval from the city’s Board of Supervisors June 27.
The Delaware measure, known as House Bill 1, was signed by Governor John Carney (D) on June 14 this year. Essentially, House Bill 1
- -bars employers from seeking pay histories of applicants before they’ve made employment offers,
- -prohibits salary-based job applicant screening where prior compensation must satisfy certain minimum or maximum criteria, and
- -allows the confirmation of salary history information after an employment offer has been made and compensation terms have been spelled out.
Delaware’s law will take effect this coming December.
The Oregon measure, House Bill 2005, signed June 1 by Governor Kate Brown (D) enacts similar restrictions as Delaware’s House Bill 1. The Oregon law, however, goes further:
- 1. It expands existing equal pay provisions to prohibit pay discrimination based on race, color, religion, sexual orientation, national origin, marital or veteran status, disability, and age in addition to gender-based bias.
- 2. It allows pay disparities to be permitted if they exist because of seniority or merit systems, earnings tied to quantity or quality, workplace locations, travel, education, training, experience, or any combination of these factors.
- 3. It allows employers to avoid compensatory and punitive damages if they’ve conducted an audit and taken steps to eliminate current pay inequalities.
Oregon’s law takes effect in September, however, employers can’t be sued for violating these pay history provisions until January 1, 2019. They also won’t face penalties in the form of compensatory or punitive damages until 2024.