by Bonnie Karns, human resources director, ICMA
Maryland lawmakers have introduced a bill that would prevent employers from requiring past salary information on an employment application as a condition for employment consideration. Some states and cities have already passed similar legislation preventing employers from relying on salary history to make hiring and compensation decisions: Massachusetts, California, Delaware, Oregon, New York City, San Francisco, and Philadelphia. In September 2016, Congress introduced the “Pay Equity for All Act of 2016” bill, which would allow the U.S. Department of Labor to assess fines up to $10,000 against employers that violate the law by asking questions about an applicant’s salary history. This legislation was referred to the Committee on Education and the Workforce, where it is still under review.
As a matter of general practice, the question “What is your current or prior salary?” is found on job applications, and candidates can dread to answer it for a good reason. The pay gap between men and women can start as early as after college graduation, even when the field of study is the same, according to an American Association of University Women study (http://www.aauw.org/what-we-do/public-policy/aauw-issues/gender-pay-gap). The pay disparity is compounded when an employer bases a job candidate’s wages on an individual’s previous salary history.
Although most employers do not intend to discriminate on the basis of gender, race or ethnicity, asking for prior salary information before offering a job to an applicant can have a discriminatory effect in the workplace that begins or reinforces the wage gap. This gap is widened by such factors as applicants who may have taken time off to care for children or other family members and market compensation changes during the time they are unemployed. Job applicants can be penalized when employers set compensation decisions based on prior salaries.
The trend is encouraging employers to make hiring decisions based on qualifications, along with compensation based on market conditions, thereby removing any potential barriers to equal pay for women and minorities. ICMA members will want to monitor legislative activity in their states to ensure compliance, or be proactive, as ICMA is, and voluntarily eliminate the previous wage question from their applications for employment.