“How Much Do You Currently Make?” – Banning Salary History Questions

This post was written by Jessica Clay, a volunteer who serves on our Economic Justice Committee.

Women Are Still Paid Less Than Men

According to the National Women’s Law Center, and the Equal Employment Opportunity Commission (“EEOC”), American women who work full-time make only 79 to 80 cents for every dollar their male counterparts earn. Over the course of a year, this averages to more than $10,000 less in median earnings. The wag-gap is even more pronounced for women of color. The National Women’s Law Center found that Latina, Native American, and African American women make between 55 and 60 percent of the wages of white, non-Hispanic men, for full-time, year-round work.

Pay and compensation discrimination based on sex is prohibited under federal law by the Equal Pay Act of 1963, (EPA”), and Title VII of the Civil Rights Act of 1964, (“Title VII”), as well as under many state and local laws. The laws apply to all forms of employee compensation:  salary, bonuses, overtime pay, holiday pay, stock options and profit sharing, reimbursements, and benefits. Under the EPA, men and women are required to be given equal pay for equal work in the same establishment for jobs that are substantially equal. It is permissible, under the Act, to pay individuals differently based on seniority, merit, the quality or quantity of production, or any factor other than sex.  Title VII, likewise, prohibits discrimination in compensation based on sex, as well as, race, color, national origin, religion, or disability. Title VII, unlike the EPA, does not require that the employee’s job be substantially equal to a male counterpart. Likewise, Title VII does not require the comparator to work in the same establishment.

New Laws Preventing the Perpetuation of the Wage Gap

While pay discrimination can be based on experience, education, merit, or industry, it can also be perpetuated by allowing new employers to justify salaries based on the discriminatory pay of former employers. There is a growing trend of states and cities proposing legislation that bars an employer from asking a potential employee about their salary history. These laws are based on the idea that pay discrimination can follow a woman from employer to employer, throughout her career, because each job move is based on pay that is already lower than her male counterparts. Basically, pay discrimination can be compounded from job to job, throughout a woman’s career. These proposed laws seek to prohibit employers from relying on prior, likely inequitable, compensation-levels when setting salaries for incoming employees. Opponents of these measures contend that the law are unnecessary and will hurt the hiring process.

Earlier this year, in Rizo v. Yovino, the Ninth Circuit Court of Appeals, overturning a lower court ruling in California, held that employers may pay women less than men for the same job based on their previous salaries. In other words, if a woman is paid less than a male counterpart because of pay discrimination at her former employer, her next employer can legally continue that pay disparity. The Ninth Circuit rejected the reasoning of the lower court, which concluded that basing women’s salaries on their prior salaries was inherently discriminatory because women likely faced pay discrimination at their previous jobs because of gender bias.

To prevent the perpetuation of the wage-gap, Philadelphia, New York City, and Massachusetts, have all passed laws that prohibit employers from asking job candidates about their salary history or benefits before making a job or salary offer. Women often start out their careers with unequal pay, and the wage discrimination follows them throughout their careers, from job to job. Last year, Massachusetts passed the first law that bars an employer from asking an applicant about their current salary or salary history.  Philadelphia’s law, which was set to go into effect on May 23, is on hold by a federal court. New York’s law, an amendment to the NYC Human Rights Law, is set to go into effect later this year, and Massachusetts’s in July of 2018. In January, New York Governor Andrew Cuomo also proposed two executive orders aimed at eliminating the wage gap for public employees.  Numerous other states and local governments, are all considering similar laws, including: California, Illinois, Maine, Maryland, New Jersey, Pennsylvania, Rhode Island, Vermont, and Washington D.C. The expectation is that, if employers don’t set employee wages based on discriminatory salary history, instead salaries would be strictly market-based. A bill prohibiting employers from asking salary-history questions during job interviews nation-wide, has also been proposed at the federal level. Currently, the proposed Pay Equity for All Act of 2016, (H.R. 6030) is in the House Committee on Education and the Workforce.

Linking women’s salary to their previous salary can compound wage discrimination in the workplace. While much is still left to be done to close the wage gap, these types of laws are a step in the right direction. We must continue the fight for Equal Pay.

 

Sources

H.R.6030 – Pay Equity for All Act of 2016 114th Congress (2015-2016), https://www.congress.gov/bill/114th-congress/house-bill/6030

Facts About Equal Pay and Compensation Discrimination, U.S. Equal Employment Opportunity Commission, https://www.eeoc.gov/eeoc/publications/fs-epa.cfm

FAQ About the Wage Gap, National Women’s Law Center, https://nwlc.org/resources/faq-about-the-wage-gap/

Introduction of the Pay Equity Act of 2016, Congressional Record, September 14, 2016, Extension of Remarks, https://www.congress.gov/crec/2016/09/14/CREC-2016-09-14-pt1-PgE1269-3.pdf

Equal Pay Act Charges (Charges filed with EEOC), (includes concurrent charges with Title VII, ADEA, ADA, and GINA) FY 1997 – FY 2016, U.S. Equal Employment Opportunity Commission, https://www.eeoc.gov/eeoc/statistics/enforcement/epa.cf1m

Written Testimony of Jocelyn C. Frye, Senior Fellow, Center for American Progress, Hearing of March 16, 2016 – Public Input into the Proposed Revisions to the EEO-1 Report, https://www.eeoc.gov/eeoc/meetings/3-16-16/frye.cfm

Asking for Salary History Perpetuates Pay Discrimination from Job to Job, National Women’s Law Center, https://nwlc.org/resources/asking-for-salary-history-perpetuates-pay-discrimination-from-job-to-job/

Lawmakers Advance Bill to Ban Salary History Questions, U.S. News and World Report, Best States, New Jersey News, https://www.usnews.com/news/best-states/new-jersey/articles/2017-05-23/lawmakers-advance-bill-to-ban-salary-history-questions

Banning Salary History Questions: A Game Changer?, Society for Human Resource Management, Oct. 6, 2016, https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/banning-salary-history.aspx

Recruiting and “Off-Limits” Questions about Salary History – What Employers Need to Know, Drinker Biddle & Reath LLP, https://www.lexology.com/library/detail.aspx?g=0c070d26-9a3f-4aa4-ac68-757f41653682

Legislation Limiting an Employer’s Ability to Inquire About and Consider Applicants’ Prior Salary History Gains Momentum, Employment Matters Blog, https://www.lexology.com/library/detail.aspx?g=a066dabe-216e-402c-b6c7-19afba71f10f

The “New York Promise Agenda” Promises to Increase Employee Protections, Orrick Employment Law and Litigation, http://blogs.orrick.com/employment/2017/01/23/the-new-york-promise-agenda-promises-to-increase-employee-protections/

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