This week Massachusetts became the first state to ban employers from asking job applicants about salary history prior to making a job offer. The new law aims to narrow the state’s gender wage gap by making it illegal for employers to:
- Prohibit discussion about employee wages in the workplace;
- Screen applicants based on wage or request disclosure of prior wage history;
- Seek a prospective employee’s salary history from a former employer; or
- Engage in related retaliation.
The Massachusetts law is part of a recent trend to expand pay equity protections by amending laws at the state level. Amendments to Maryland’s Equal Pay for Equal Work Act will take effect October 2016. Like other recently amended statutes, the Maryland law addresses wage discussion/disclosure in the workplace. It also prohibits pay inequity based on gender identity; permits pay comparisons among employees working at different locations in the same county; and prohibits an employer from providing “less favorable employment opportunities” (e.g., failing to provide information about a promotion, and assignment to a less favorable career track) based on sex or gender identity.
Regardless of whether your business has been affected, will be affected or could be affected by changing legislation, there are steps you can take to reduce the risk of liability for fair pay claims. Conducting a self-evaluation of pay practices (an affirmative defense under the Massachusetts law) is a good place to start. This should include examining processes for making pay decisions; looking at how performance is measured and any impact on compensation; and identifying and addressing pay disparities within job classifications when necessary. Training for management and hiring staff as well updating employee handbooks to reflect compliance will also serve to protect your business.