The Equal Pay Act and Salary History Bans: What You Need to Know
One of the most anticipated employment cases before the Supreme Court this term was Yovino v. Rizo. The issue was whether an employer may properly rely on a new hire’s salary history to establish starting pay under the federal Equal Pay Act (EPA).
Passed in 1963, the EPA was aimed at abolishing sex-based wage disparity. Yet, according to recent data from the U.S. Census Bureau, women earn only 80.7 cents for every dollar earned by men. In Yovino, a female employee was hired as a math consultant by the Fresno County Board of Education. Later, over an office lunch, she learned that her more recently hired male colleagues earned more than she did. The County defended the salary differential based on its policy that used an employee’s past salary to determine his or her pay rate and argued that it was a non-discriminatory “factor other than sex”, while the employee challenging the policy contended that it was impermissible because it perpetuated discriminatory pay practices. In the end, the Supreme Court’s per curiam ruling sidestepped the question and sent the case back to the Ninth Circuit.
Recognizing that the use of prior salary history can serve to disadvantage women, and with the purpose of ending the cycle of pay discrimination, as of November 1, 2019, 18 states and 19 local governments passed legislation that prohibit employers from asking job applicants about their salary history. The specifics of the laws vary: some bar employers from using an applicant’s pay history to set compensation if it is discovered, or even if volunteered by the applicant; others require employers to provide applicants with a salary range for the position sought and some prohibit employers from taking disciplinary action against workers for discussing their wages.
In the Gulf South, the following states and cities have implemented salary history bans: Alabama; Atlanta, Georgia (for city agencies); New Orleans, Louisiana (for city departments); Jackson, Mississippi (for city agencies); and Missouri (for Kansas City departments and state-wide for employers with 6 or more employees). The scope of these bans differ dramatically. Even if your jurisdiction does not presently have a salary history ban, you should be mindful that it is an open question whether using an applicant’s salary history to set his or her pay is permissible under the Equal Pay Act.
Tips for Compliance with Salary History Bans and Equal Pay Laws
- Review current and pending salary history ban and equal pay laws in your jurisdiction;
- Ensure job applications do not ask applicants to disclose their salary histories or prior pay;
- Do not ask applicants about their salary history during the interview process;
- If your company uses recruiters to assist with hiring, ensure that those companies do not seek salary history information from applicants;
- Employers may rely on an applicant’s salary requirements and expectations, and use an applicant’s experience and education to determine pay; and,
- Review salary data for men and women in the same positions to ensure that any pay disparity is justified by experience, education or job performance and not based on gender.
**The information provided does not, and is not intended to, constitute legal advice.