United States: Will Laws Banning Discussion Of Past Salaries Become The New Sick Leave?

Last Friday, my colleague Alexander Leonard, reported that Massachusetts had just passed a sweeping gender equity law that would prohibit employers from asking applicants about their past salary history.  Days after the Massachusetts law was signed by Governor Baker, the New York City Public Advocate Letitia James introduced a similar bill. We wonder if laws like these will be become part of a new grassroots movement that produce a lot of patchwork laws like sick leave laws have been in the last few years.

The proposed bill has 6 co-sponsors and was designed to implement one of the policy recommendations from Ms. James' April 2016 pay equity policy report.

If passed, it would be illegal for NYC employers and employment agencies to ask about any applicant's salary history or benefits. Employers and employment agencies could not get around this law by conducting public record searches on applicants. Finally, the law would make it illegal for employers to rely on salary history to determine an applicant's salary.

Employers have long asked applicants about their salary history in an attempt to find the appropriate salary to offer a candidate. This is done both to save money for the employers, but just as often to insure that a previous salary is at least being matched with the new offer.

Massachusetts' law does not go into effect until January 2018.  If New York City's law passes it will likely be effective before Massachusetts' law goes into effect. This means that New York City employers won't have the benefit of seeing how this law will affect the interviewing and hiring process. Questions remain as to whether laws such as this will in fact close the gender pay gap or will simply make the hiring process more time-consuming and drawn out as employers struggle to hit on the appropriate compensation to get candidates to accept job offers.

We will keep an eye on this one.

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