You have interviewed a number of candidates for a job at your store and want to offer one of them a position. To ensure that you offer a salary that will be attractive to the applicant, you ask, “What are you making at your current job?” Or maybe you ask for the applicant’s salary history on the job application form. Such questions may violate the law dependent on where you are located.
Delaware, Massachusetts, New York City, Philadelphia, and Puerto Rico enacted laws that prohibit employers from asking job applicants for their salary history. According to the National Conference of State Legislatures, many other states are considering legislation including California, Connecticut, District of Columbia, Georgia, Iowa, Idaho, Illinois, Maryland, Maine, Mississippi, Montana, North Carolina, New Jersey, Oregon, Rhode Island, Texas, Virginia, Pennsylvania, Vermont and Washington. On the federal level, a bill has been introduced to ban all salary history inquires, but the bill is stalled in committee and unlikely to move forward at this time.
These laws are aimed to prevent perpetuating the historic salary disparities for women and minorities by preventing their salaries from being based on the applicant’s previous pay. Federal law already prohibits gender-based pay discrimination, but violations are hard to prove. As a result, wage disparities continue to persist. Accordingly, states are increasingly seeking ways to prevent discrimination. Twelve states require companies to let employees compare how much they are paid making it illegal for an employer to prohibit its employees from discussing their salaries. California’s current law specifically provides that “prior salary shall not, by itself, justify any disparity in compensation.” Accordingly, paying a woman a lower salary than her male contemporaries cannot be based on the fact that her salary is higher than what she was paid at her prior job. The last trend is to simply prohibit employers from asking for prior salary information.
Violating these laws can be costly. Not only can an individual bring a civil lawsuit for violations of the law, but most allow the state to bring a lawsuit to enforce the law. Moreover, some of the laws impose civil penalties. For example, employers in Delaware “shall be subject to a civil penalty of not less than $1,000 nor more than $5,000 for the first offense and not less than $5,000 nor more than $10,000 for each subsequent violation.” New York City imposes even bigger fines, with a civil penalty of up to $125,000 for an unintentional violation, and up to $250,000 for a “willful, wanton or malicious act.”
With more and more states considering banning employers from asking about applicants’ salaries before offering them a job, it is important that all flooring dealers and contractors consult legal counsel on what they can and cannot ask job applicants.