In recent months, several states and localities have passed laws and ordinances banning inquiries into an applicant’s prior compensation, including in California, Massachusetts, Delaware, New York City, Oregon, Puerto Rico, San Francisco, and Philadelphia. There are similar laws currently under consideration in a number of other states, and this topic is bound to be a key focus for lawmakers in 2018.
Companies in jurisdictions with already enacted laws should ensure they enter the New Year in compliance with any new salary inquiry requirements.
Here are a few best practices employers should consider incorporating into their processes:
- Remove all pre-offer salary history information from sources used to collect applicant information in those jurisdictions with salary history bans. Employers also should ensure that written policies conform to the law. This includes questions posed on written employment applications, as well as online sources, such as Applicant Tracking System software used to aid in the HR process.
- Train recruiters and talent acquisition teams. Be sure to train all HR personnel, recruiters, third-party hiring agencies, and anyone else involved in the hiring process on the new requirements, including how to document when an applicant voluntarily discloses salary history.
- Be cognizant of when you ask for an applicant’s W-2 form. Asking for an applicant’s W-2 form before the salary history question becomes lawful may violate some salary inquiry bans. New York’s ban, for example, allows employers to ask for W-2 forms only to verify voluntary and unprompted salary disclosures. Such a request may be prohibited even after an employer makes a conditional offer and has set compensation for the job.
- Understand what is meant by “compensation.” “Compensation” should be interpreted broadly and as including more than just an applicant’s base salary, such as vehicle allowances, retirement plan contributions, or bonuses. Inquiry into all of these measures as defined “compensation” are prohibited.
Our Pay Equity Resource Group attorneys are available to provide strategic guidance as more localities begin instituting salary history bans and similar pay equity measures in 2018.