“What is your current salary?”

Que sweaty palms and panic as you prepare to answer the question.

Not only is this an awkward question for a job candidate, it is also awkward for the person conducting the job interview.

If you have ever interviewed anyone before, you know it can be uncomfortable to bring up the candidate’s current salary in the conversation. It can send the pleasant interview dynamic to a screeching halt.

Another reason the topic is so delicate: gender bias.

So, what are some states and localities doing about it? Banning the question all together.

The salary history ban makes it illegal to ask about a candidate’s current or past salary during a job interview. There are many reasons why the salary history ban is spreading across the United States.

According to ThinkHR, the rationale for these laws stem from the equal pay issue and the premise that pay for the job should be based on the value of the job to the organization, not the pay an applicant might be willing to accept.

The background of the salary history ban.

Women still earn 77.9 cents compared to every dollar earned by men, according to PayScale.

When a new salary is based on someone’s salary history, it can limit growth and preserve previous unequal pay between men and women.

For example, a man and a woman have the same previous job and the same resume/qualifications. The woman made $40,000/year and the man made $45,000/year for the same work. They are now both applying for the same position at another company. The salary range for the company to offer for the position is between $44,000 and $49,000.

If these same two people apply, the man would likely hold higher negotiating power to receive a salary offer on the higher end of the range, where the woman’s offer would most likely be at the bottom range. However, if an employer went in the negotiations blind to what they previously made, it gives both candidates better negotiating power.

As the employer, whether you know it or not, you might be subliminally making judgement on candidates due to their past salary.

The New York Times looked into an experiment where half of employers couldn’t see the applicant’s past salary history and half could see it. The employers who couldn’t see past pay viewed more applications, requested more interviews and asked more questions. This experiment showed that employers often rely too much on past salary to judge a candidate. That mindset can severely limit the number of qualified applicants for the job, only giving the employer a smaller pool to choose from. 

Despite the experiment, some argue that the salary ban presents disadvantages for employers and applicants. For example, banning this question could make it difficult for employers to determine if a candidate is the right fit for the position’s pay range. If you’d like to look more into the pros and cons of the salary history ban, Forbes put together a great article that breaks it all down. Click here to read it.

Who does the salary ban impact?        

According to HRDive.com, there are 11 state-wide salary history bans and 10 local salary history bans currently or soon-to-be in effect. The first state to enact the salary history ban was New York on Jan. 9, 2017. Both Hawaii and Connecticut will enact the ban come Jan. 1, 2019. See the list below from HRDive for all the states that have some form of the salary history ban.

Of course, it’s important for you to double check your own local regulations – this is only to be used for educational purposes.

**Please note, these regulations apply to different types of employers (ex. public vs. private). It is important to double check your own state's specific standards.**

States

  • California
    • Effective Date: Jan. 1, 2018
  • Connecticut
    • Effective Date: Jan. 1, 2019
  • Delaware
    • Effective Date: Dec. 14, 2017
  • Hawaii
    • Effective Date: Jan. 1, 2019
  • Massachusetts
    • Effective Date: July 1, 2018
  • New Jersey
  • New York            
    • Effective Date: Jan. 9, 2017
  • Oregon
    • Effective Date: Oct. 6, 2017
  • Pennsylvania
    • Effective Date: Sept. 4, 2018
  • Puerto Rico
    • Effective Date: March 8, 2017
  • Vermont
    • Effective Date: July 1, 2018

Cities/Counties

  • San Francisco, CA
    • Effective Date: July 1, 2018
  • Chicago, IL
    • Effective Date: April 10, 2018
  • Louisville, KY
    • Effective Date: May 17, 2018
  • New Orleans, LA
    • Effective Date: Jan. 25, 2017
  • Kansas City, MO
    • Effective Date: July 26, 2018
  • New York City, NY
    • Effective Date: Oct. 31, 2017
  • Albany County, NY
    • Effective Date: Dec. 17, 2017
  • Suffolk County, NY
    • Effective Date: June 30, 2019
  • Westchester County, NY
    • Effective Date: July 9, 2018
  • Pittsburgh, PA
    • Effective Date: Jan. 30, 2017

States & jurisdictions that have banned the salary history ban.

  • Michigan
  • Wisconsin
  • Philadelphia, PA

According to Bloomberg.com, Michigan Gov. Rick Snyder signed the legislation specifying that local governments cannot restrict what employers can and can’t ask in the interview process. Some believe that the salary ban law would restrict freedom of speech. Philadelphia recently banned the salary ban because U.S. District Judge Mitchell S. Goldberg declared that it violated the First Amendment’s free-speech clause, according to SHRM.com.

What does the salary history ban mean for small businesses?

It is very important to check if you state or local jurisdiction has enacted the salary history ban. If your business is located in any of the places mentioned in the above chart, be sure to further research the law and if your small business is affected.

PrimePay’s HR Advisory can assist in keeping you compliant. Click here to learn more about our solution or fill out the form below.  

Disclaimer: Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.