Tag: salary history

Job Applicant Pay History Inquiries Now Off-Limits in Illinois

As of September 29, 2019, Illinois employers may not ask job applicants or their prior employers about salary history. The change comes after Illinois Governor J.B. Pritzker signed an amendment to the Illinois Equal Pay Act of 2003.

The New Requirements

The Illinois Equal Pay Act of 2003 made it illegal to pay employees differently on the basis of sex or the employee’s status as an African American, subject to exceptions. The impetus behind the law is to address historic pay disparities for the same or substantially similar work. The amendment now takes the law a step further to address the practice of using pay histories of applicants to set wages (including benefits and other compensation). Specifically, the amendment makes the following additions to the Illinois Equal Pay Act of 2003:

  • Employers, including employment agencies, may not screen out applicants on the basis of their current or prior wage history by setting a maximum or minimum wage level that applicants must satisfy.
  • Employers may not request or require disclosure of an applicant’s wage history as a condition of employment.
  • More specifically, employers may not request or require disclosure of an applicant’s wage history as a condition of being considered for employment, being interviewed, continuing to be considered for employment, or receiving a job offer.
  • Employers may not seek the wage history of an applicant from any current or prior employer.

If an applicant voluntarily discloses his or her pay history this does not create a violation. However, the employer cannot then use the voluntarily disclosed pay history in consideration of employment, an offer of compensation, or setting future wages, benefits, and other compensation.

What Are Employers Permitted to Do?

While employers cannot look into the wage histories of applicants, they are still permitted to share salary and benefit information about the position the applicant seeks. Employers can also discuss salary expectations with applicants without running afoul of the law.

Employers with Illinois employees should review their recruitment and compensation practices, including paper applications and online forms, to remove any references and requests regarding an applicant’s pay history. Further, human resources employees should be trained on appropriate recruitment procedures for Illinois employees.

©2019 von Briesen & Roper, s.c

For more state salary history bans, see the National Law Review Labor & Employment law page.

Connecticut’s Pay Equity Law Prohibits Salary History Inquiries

As of January 1, 2019, Connecticut employers are prohibited from inquiring about prospective employees’ wage or salary histories. Connecticut’s new pay equity law is intended to promote equality in pay and close the wage gap. Under the new law, employers—defined as entities having “one or more employees”—are also prohibited from using a third party to inquire about any applicant’s wage or salary history. Employers may still inquire about the components of an applicant’s compensation structure—for example, retirement benefits or stock option plans—but they may not inquire about the value of any individual component.

Nothing in the law prevents an employer from verifying salary information if a prospective employee voluntarily discloses such information. Additionally, the law does not apply where a federal or state law “specifically authorizes disclosure or verification of salary history” in the employment context.

A private right of action exists for violations of the law, and a prospective employee can potentially recover compensatory damages, attorneys’ fees and costs, and punitive damages. A two-year statute of limitations applies.

In light of this new law, Connecticut employers should revise their employment applications to remove any requests for candidates’ salary histories. Employers that have hiring policies and/or hiring scripts should revise these documents to remove any questions about salary histories. Further, employers may want to affirmatively state that it is the employer’s policy not to make such inquiries. Connecticut employers may also want to ensure that any employees involved in interviewing candidates are trained on the new law and understand that they should not be asking about salary history information. Finally, employers may want to verify that any third parties they are using to help screen candidates are aware of and in compliance with the new law.

 

© 2018, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
Read more employment updates on the National Law Review’s employment law page.

Oregon Expands Effort to Achieve Equal Pay

This month, Oregon joined a number of other states, including California, Massachusetts, Maryland, and New York by strengthening existing equal pay laws. The new law, the Oregon Equal Pay Act of 2017 (“OEPA”), has three (3) central components:

  • Applying equal pay protections to disparities based on race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age;
  • Curbing an employer’s ability to obtain or rely upon an applicant’s prior compensation to determine his or her current compensation; and
  • Changing and substantially limiting the defenses available to employers sued for alleged equal pay violations.

The bulk of the OEPA’s substantive provisions is effective January 1, 2019.

Broadening Scope of Equal Pay Protections

The OEPA prohibits disparities in “wages or other compensation” between employees performing work of a “comparable character” based on race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability or age. Work is of a “comparable character” if it requires “substantially similar knowledge, skill, effort, responsibility and working conditions [.]” This is a substantial expansion of prior law, which only applied to sex-based pay disparities.

The OEPA also limits an employer’s ability to rely upon prior compensation by:

  • Making it unlawful to seek information about an applicant’s or employee’s compensation history; and
  • Prohibiting employers from screening job applicants or determining compensation based on a prospective employee’s current or past compensation.

However, these pay history restrictions do not apply “during a transfer, move or hire of [an] employee to a new position with the same employer.”

Limited Defenses to Equal Pay Claims

Under prior Oregon law, an employer could defend a sex-based pay disparity by demonstrating that it was based on (a) a seniority or merit system, or (b) good faith factors other than sex.

However, under the OEPA an employer can only pay differential wages for work of a comparable character if the disparity is attributable to “a bona fide factor that is related to the position in question and is based on” one or more of the following:

  • A seniority system;
  • A merit system;
  • A system that measures earnings by quantity or quality of production;
  • Workplace locations;
  • Travel, if travel is necessary and regular for the employee;
  • Education;
  • Training; or
  • Experience.

The employer must also demonstrate that the factor(s) creating the pay disparity account for the entirety of the differential.

Potential Limits on Remedies

In addition to back wages, employees bringing claims under the OEPA may also seek compensatory and punitive damages. However, the law limits remedies against employers that take specified steps to achieve pay equality.

Under the OEPA, a court “shall” disallow an award of compensatory or punitive damages if the employer shows that within three (3) years of the employee bringing the OEPA claim, the employer conducted a good faith equal pay analysis that: (a) was “[r]easonable in detail and scope in light of the size of the employer”; (b) related to the protected class at issue in the action (e.g., sex, age, race, etc.); and (c) “[e]liminated the wage differentials for the plaintiff and [] made reasonable and substantial progress toward eliminating wage differentials for the protected class asserted by the plaintiff.”

What This Means for Employers

Because the bulk of the OEPA changes are not yet effective, now is the time for employers to commence their compliance efforts including:

  • Reviewing job applications to ensure they do not seek prior compensation information;
  • Auditing compensation data to identify protected class-based disparities, if any. If this analysis reveals disparities, employers can avoid or limit future claims and damages by eliminating any identified differentials;
  • Training managers and human resources professionals regarding the permissible considerations when making compensation decisions, and how to document such decisions;
  • Revising employee job descriptions to ensure they reflect the substantive distinctions between positions – i.e., the fact that jobs are not of a “comparable character” is reflected in job descriptions; and
  • Revising employee reviews on which compensation decisions are based to ensure they reflect the considerations that are permissible grounds for a pay disparity under OEPA.
This post was written by Brian K. Morris of Polsinelli PC.

 

What Was Your Prior Salary? No Longer Question You Can Ask When Hiring in New York City

Last month, the New York City Council approved legislation that bars employers from asking prospective hires to disclose their past salary. In passing the measure, New York City joins Massachusetts (see our post here), Puerto Rico and the city of Philadelphia in banning the question from job interviews and on applications. (Also see our post here regarding a recent Ninth Circuit decision addressing pay history.) The law, known as Introduction 1253-A, makes it illegal for any employer or employment agency in New York City to ask about an applicant’s salary history, including benefits, or search any publicly available records to obtain any such information. The measure, aimed at tackling pay inequity, is intended to stop perpetuating any discrimination that women or people of color may have faced in the past and to end wage disparities between men and women. A study released earlier this month by the National Partnership for Women & Families, a Washington, DC-based advocacy group, shows that women in New York State earn 89 cents for every dollar that men are paid. The pay gap is wider among minority women, the study found. African American women in New York earn 66 cents for every dollar paid to non-Hispanic white men. Latina women earn 56 cents for every dollar.

Labor Law HiringThe measure only applies to new hires, not to internal job candidates applying for a transfer or promotion given that their salary information may already be on file. It also excludes public employees whose salaries are determined by collective bargaining agreements. There are certain exceptions built into the bill whereby employers can consider salary history, including the hiring of internal candidates for different positions, workers who are covered by a collective bargaining agreement or employees who voluntarily give their salary history during an interview.

New York City Public Advocate Letitia James, who co-sponsored the bill last year, said the primary focus of the bill is to promote greater transparency in the hiring process. Although it doesn’t require employers to do so, James said the bill suggests to businesses that they post salaries for jobs instead of relying on workers’ past salary.

The City’s Commission on Human Rights will investigate and enforce the measure, imposing a civil penalty of no more than $125 for an unintentional violation or up to $250,000 for an intentional malicious violation. Those figures are in line with other forms of discrimination — including race, disability and sexual orientation bias — for which the commission issues fines.

Fatima Goss Graves, president-elect of the National Women’s Law Center, said in an email that the measure “stands to transform the way that companies operate around the country,” she said. “So many companies operate in multiple jurisdictions. If a company changes its practices in New York, it is likely to also make changes around the country.” I think what we’ll see is companies that do business in New York City just eliminate that from their applications entirely,” she said. “This will have wide-ranging influence.” Meanwhile, nearly 20 states, the District of Columbia and two cities (San Francisco and Pittsburgh) have introduced legislation that includes a provision against salary history information, according to data from the NWLC.

The new legislation is expected to go into effect later this year, or 180 days after Mayor de Blasio signs the bill.  Employers in New York City need to review their applications and standard job questions to ensure they remove any questions about past salaries.