‘Tis the season . . . for state legislatures to close for the year. While we’re seeing legislative activity at the state level slow down, the past few months brought a flurry of activity in the area of pay equity and bans on salary history inquiries. Here is a recap of recent activity and noteworthy developments.
Albany County, New York
In October, the Albany County Legislature unanimously passed a salary history ban ordinance, Local Law P, which will prohibit Albany County employers with four or more employees and employment agencies in the county from
- Screening job applicants based on their current or prior salary;
- Requiring that an applicant’s salary history satisfy minimum or maximum criteria;
- Requesting or requiring that a job applicant disclose his or her salary history as a condition of being interviewed or considered for an offer of employment; and
- Seeking an applicant’s salary history from any current or former employer.
Under the ordinance, “salary history” includes “benefits or other compensation.” Additionally, the ordinance contains an exception. Employers may confirm an applicant’s salary history only after an offer of employment with compensation has been made, and if the applicant provides written authorization to contact previous employers.
Albany County Executive Daniel McCoy signed the bill into law on November 6, 2017. It will go into effect on December 17, 2017.
The California General Assembly ended its legislative session in October. Before it did, the state enacted a statewide prohibition on asking for applicants’ salary history (A.B. 168). Beginning January 1, 2018, all private and public-sector California employers will be prohibited from
- Relying on an applicant’s salary history as a “factor” in determining whether to offer employment to an applicant or what salary to offer; and
- Seeking an applicant’s “salary history information” orally or in writing, directly or indirectly. Salary history includes both “compensation and benefits.”
However, employers may consider or rely on salary history information if an applicant “voluntarily and without prompting” discloses his or her salary history to a potential employer. Keep in mind, even with this exception, the new law does not change a previous amendment to California’s Fair Pay Act, which prohibits an employer from relying solely on salary history to justify a disparity in compensation.
In addition, California employers must, upon reasonable request, provide an applicant with the pay scale for the position to which the applicant applied. The new law does not define “reasonable request” or “pay scale.”
A violation will not constitute a misdemeanor under the relevant section of the California Labor Code, but the law does not specify any penalty or other remedy for non-compliance. As the January 1, 2018 effective date draws closer, we may receive further guidance from the California legislature and state administrative agencies regarding the means of enforcement.
While California passed one equal pay law, Governor Brown vetoed the Gender Pay Gap Transparency Act, A.B. 1209, which would have required employers with 500 or more employees in the state to biennially provide information on their “gender pay differentials” to the Secretary of State. Under this law, a large employer would have been required to report on the difference between the mean and median wages of male and female exempt employees by job classification or title. Similar information would have been required for male and female board members. The bill had support in the Legislature, but Governor Brown vetoed it with concerns that it was ambiguous and would encourage more litigation than pay equity. Governor Brown also noted in his veto message that the State’s Pay Equity Task Force was in the process of developing guidance and recommendations to assist employers in assessing their current wage practices.
The Governor’s veto could be overridden by a two-thirds vote of both California legislative houses. While Democrats currently have a supermajority in both chambers, meaning they have the numbers to override a veto, the Legislature has not overridden a veto since 1979 when Brown previously was governor.
In addition to the new statewide ban on salary history inquiries, private and public employers registered to do business in the city of San Francisco must also comply with the city’s salary history inquiry ordinance, which takes effect July 1, 2018. While the ordinance is similar to the statewide law, it includes some additional restrictions and affirmative requirements.
Illinois failed to join the salary history inquiry “ban” wagon in November when the Illinois Senate failed to override Governor Rauner’s veto of a salary history ban. As discussed in an earlier post, the Illinois state legislature passed H.B. 2462 which would have prohibited employers from seeking salary history and also would have amended the state’s equal pay law, replacing the requirement that an employee prove that the jobs being performed require “equal skill, effort, and responsibility” with a “substantially similar” standard.
On October 25, 2017, the Illinois House voted 80-33 to override the Governor’s veto, but the vote in the Senate was 7 “yeas” short of the three-fifths required to override the veto and become law.
Notable Pending Bills
While many legislatures have closed or are closing for the year, there are several pay equity bills still lingering, due in part to the fact that many of these jurisdictions have two-year legislative cycles with “carryover” to even-numbered years, including: Washington, D.C., Georgia, Iowa, Michigan, New Hampshire, New York, North Carolina, Pennsylvania, Vermont, and Washington.
In addition, Florida and New Hampshire have pre-filed equal pay bills for consideration during the 2018 legislative session: H.B. 393 and S.B. 594 (in Florida) and H.B. 1222 (in New Hampshire). The Florida bills would strengthen the current equal pay law and impose wage transparency provisions and a salary history inquiry ban. The New Hampshire bill would prohibit employers from requiring an applicant to disclose his or her salary history prior to an offer of employment.
* * * *
With several pay equity and salary history laws coming into effect in the coming year, employers should review their application forms and hiring and pay practices, educate recruiters and managers on how to comply with salary history prohibitions, and consider conducting a privileged proactive pay analysis.
Jackson Lewis’s Pay Equity Resource Group attorneys are available to provide strategic guidance. Stay tuned for updates.