Laws prohibiting employers from asking candidates about salary history information have been trending across the US. Seven states and seven localities have some kind of salary history ban in place. Some of these laws prohibit employers from asking employers about a candidate’s salary history before an offer has been made, while some prohibit employers from ever seeking or confirming salary information or using it as a factor in determining pay. San Francisco’s salary history ban also prohibits employers from disclosing any salary information about current or former employees. A federal appeals court in the Ninth Circuit recently held that using prior salary to determine current salary violates the Equal Pay Act, and other circuits may soon follow suit.
The benefits of a salary history ban to employees may seem obvious, but these laws may benefit employers as well. Paying employees market rate based on role and experience without regard to other factors increases employees’ sense of being valued in the workplace, which results in higher employee morale, attracts better candidates, and leads to a faster hiring process. Employers who are prevented from basing hiring decisions on salary history can avoid screening out qualified applicants, increase their hiring pool, and rely on more effective methods of determining an employee’s compensation such as interviews, reading letters of recommendation, and seeking input from current and former employers.
Let myHRcounsel’s expert attorneys help you navigate rapidly changing laws regarding salary history and develop processes for hiring candidates that will best benefit your business.