How Do Salary History Bans and Salary Transparency Laws Impact U.S. Employers?

Pay equity refers to promoting equal payments between employees of comparable or equal work. Companies and businesses will often be banned from asking prospective candidates about their compensation history.

In this blog post, we discuss the most recent laws on salary transparency and history bans in the country, as well as the different jurisdictions involved.

What Is a Salary History Ban?

A salary history ban is a law that stops employers from including questions about an applicant’s previous salary in their interviews. These were implemented to encourage equal pay for all employees, which may benefit people who have faced race or gender-related inequality from their previous employers.

In places where a salary history ban is in place, the salaries offered won’t be negatively compared to a candidate’s previous salary. On the other hand, a person who voluntarily discloses their previous compensation can use this to negotiate a better salary.

Many states and cities have enforced a salary history bans and salary transparency laws to provide equality to all workers and eliminate discrimination when it comes to salaries regardless of age, gender, or race. While there are no federal laws currently, these are put in place to stop employers from asking candidates for the details of their previous salary.

Some companies and business owners regularly update company practices and job applications to comply with these laws. Those who fail to follow the law will risk violation which may result in penalties ranging from $100 to as much as $250,000.

Which Jurisdictions Practice Salary History Bans?

The table below shows a few of the states that have placed salary history bans.

Alabama Companies can’t refuse to interview, employ, or hire any applicants who won’t provide their pay history.
California No public or private employers may ask about a person’s salary history.
Colorado An employer can’t ask about a person’s salary history or use it to determine their new salary.
Connecticut Unless the salary history is voluntarily disclosed, an employer can’t ask about it.
Delaware While an employer is prohibited from asking questions about an employee’s salary history, they may ask about it after an offer.
District of Columbia (D.C.) A government agency isn’t allowed to ask questions about salary history unless it is mentioned after an offer.
Hawaii An employer can’t ask about a person’s salary history or use it as a reference unless it is provided by the employee.
Illinois An employer can’t ask about someone’s salary history, but they can ask about their salary expectations.
Maine An employer can’t ask about a person’s salary history before they make an offer.
Maryland An employer may confirm salary history but only after an offer of compensation has been given. Employers also need to give their applicants the salary range of a position they ask for.


Going Into the Future

Over the past two years, the salary transparency movement has gained more supporters and experts expect to see more and more jurisdictions follow this law. They also predict that more laws connected to this should come this year and in the years that follow.

As a result, equality will finally be the main focus of our workplaces, companies, and businesses, where everyone can enjoy equal opportunities.

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