The State of Massachusetts and the City of San Francisco are the latest jurisdictions to adopt salary history bans. These bans take effect on July 1, 2018.
In 2017, the City of New York, the State of California, as well as others, have started enforcement of these types of bans. These laws attempt to eliminate the pay gap and perpetual underpayment that can occur from using salary history as a gauge for hiring decisions or pay determination. Most of these laws tackle the pay inequality by prohibiting questions about current or past salary (and in some cases, all compensation).
An amendment to San Francisco’s Parity in Pay Ordinance will affect employers and employees in the City of San Francisco. Likewise, those in San Francisco are also subject to the rules set forth by the state’s Fair Pay Act (part of California’s Equal Pay Act). Both sets of legislation prohibit employers or agents of employers (like staffing agencies) from asking a potential employee about their current or past compensation. Applicants can voluntarily disclose their salary as long as it is disclosed without prompting. Additionally, employers are prohibited from sharing any salary information about current or former employees unless they have received express written consent from the employee or applicant in question.
Two main differences between the Parity in Pay Ordinance and the Fair Pay Act include the time to file a complaint and requests for a pay scale. Applicants or employees in the City of San Francisco will have up to 180 days to file a complaint for a violation where as the State of California will allow up to two years for filing. Second, under reasonable request by an applicant, California requires employers to provide a pay scale for a specific position.
On July 1st, Massachusetts will also start enforcement of their salary history ban under the Massachusetts Equal Pay Act. Salary cannot be sought after or inquired about through the application or interview process. However, once an offer with compensation has been made to an applicant, the employer can confirm wage or salary history. Claims for suspected violations can be filed up to three years after the incident in question.
These laws place the burden of proof on the employer. Employers should ensure that they have taken the appropriate steps (within the applicable law or ordinance) to educate their employees and interviewers of these changes. Likewise, training or educational notices will also aid an employer in proving their good faith effort.