Moving Towards Pay Equity Without Salary History

by | October 8, 2018 | Employment Discrimination

Over the past few years, there has been a movement to restrict employers from inquiring into the salary histories of prospective employees. The rationale for this prohibition is clear: certain jobs and workers have historically been underappreciated and underpaid; consequently, workers in these jobs are anchored to lower starting salaries. If employers can ask about such artificially low and discriminatory salary history, it will be difficult for these workers to break free and earn a fairer, higher, and more equal salary. Lower relative salaries are usually found in occupations with a high concentration of female and/or minority workers. By relying on salary histories to determine starting compensation, some employers perpetuate a structural wage gap between men and women and between minorities and non-minorities.

To free some of their citizens from the wage suppression caused by the tying of a new wage to what was earned in the past, several jurisdictions have recently passed legislation banning employers from inquiring about past salaries. On the municipal level, New York City and San Francisco have banned employers from asking questions regarding salary history of prospective hires. On the state level, California, Delaware, Massachusetts, Oregon, and Vermont have banned such questions. Connecticut and Hawaii will come on board in January 2019. The Commonwealth of Puerto Rico has already followed suit.[1]

In general, the above jurisdictions prohibit employers from relying on a candidate’s salary history to determine an offered salary for a position. California’s recently passed Fair Pay Act Bill, AB 2282, is illustrative of these types of legislation.  For California, the salary history includes both compensation and benefits. The employer, upon a reasonable request, can provide the pay scale for the position (after an initial interview). The Act applies to all employees, including state and local government employees. There is nothing, however, in the Act that would prevent an applicant from voluntarily providing salary history information, and the Act would not prevent the employer from considering or relying on such salary information in determining an offered salary. Also, the Act does not prevent an employer from asking the applicant for salary expectations for the desired position. The Act covers applicants who are not currently employed by the employer in any capacity. And, nothing in the Act shall be construed as providing justification for any disparity in compensation.

The goal is to break the cycle that consigns some of our citizens to perpetually lower salaries based on lower past salaries. By removing the anchor, these jurisdictions hope to break the chain of pay inequity and empower employees to rise to a fair level of pay commensurate with their talents and aspirations.

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[1] On the other hand, the state of Wisconsin prevents local governments from banning employers from soliciting the salary information of prospective employees. 2017 Wisconsin Act 327.