Regional Regulations: Pay Equity Laws 4 Jan 2018

You need look no further than the daily news for the reasons why new pay equity laws are being considered, and passed, nationwide. In December, wage equality made headlines when Catt Sadler, a popular anchor on the E! network, abruptly quit after learning that her male co-host was earning twice her salary for doing the same job.

Considering the fact that E! is based in California, where a new pay equity law was enacted in October 2017, you can bet the network’s HR department is re-evaluating its hiring practices, especially if Sadler was asked about her previous salary before she was given the job.

In addition to California, the states of Massachusetts, Oregon, and Delaware, as well as Puerto Rico, have enacted pay equity laws recently, along with the cities of Philadelphia and New York City. Pay equity is also on the docket in Illinois, New Jersey, and New York state. It probably won’t be long until your state lawmakers start considering this legislation, too.

Pay equity laws, defined

This new legislation prohibits employers from asking about a job candidate’s past salary or verifying the salary with a candidate’s previous employer via running a pre-employment FCRA-compliant background check.

Why? Odds are a woman who applies for a job will have made less than a man, and if an employer bases her compensation on her past salary, she’ll make less at this new job as well.

A woman working a full-time job earns, on average, nearly $11,000 less per year than a man, reported the U.S. Census in 2015. These laws aim to level that playing field.

The heart of it all is to nudge employers into creating a salary range for the job, no matter who holds it. Equal pay for equal work, period.

While the laws are similar in that they’re all about prohibiting employers from asking about pay history, they can vary by region.

Here are the variances between New York City, Massachusetts, and Philadelphia.

New York City

• Applies to any NYC employer with four or more employees.
• Employers can talk about salary expectations with a candidate. If, during the course of the discussion, the candidate talks about his or her past salary, the employer can use that info when making a hiring decision.

Massachusetts

• Applies to all employers in Massachusetts.
• If employers want to confirm an applicant’s prior salary, the applicant must provide authorization to do so, but only after the job offer, with compensation, has been made.
• Variations in wages for the same job can be made based on where the job is located, taking into consideration the cost of living; a candidate’s experience, education, or training; and a merit system.
• Employers may not pay a lesser wage for comparable work.

Philadelphia

• Applies to all employers in Philadelphia.
• It doesn’t apply to any actions taken pursuant to any federal, state, or local law that authorizes the disclosure or verification of wage history.

Your city or state may not have pay equity laws now, but odds are they’re coming. Savvy employers are making changes now to how they recruit, interview, and screen employees in order to get out in front of this legislation.

What employers should do?

• Remove all questions about an applicant’s past salary from your application forms. And be aware that, if you use recruiters, they must be in compliance as well or you will be held responsible.
• Train anyone who interviews job applicants, including ­HR types, managers, and supervisors, not to ask candidates about their past salaries.
• Develop a salary range for each position regardless of who holds it. Laws in your state may not require this, but some do, to the point of having to give that information to applicants if they request it.

At Trusted Employees, we’ll keep our eyes on this evolving legislation to help you make the best hires for your business.