If you’re a hiring manager or work in human resources, you know the importance of pre-employment background screening for potential new hires. Unfortunately, some of your background check process could be hindered by expanding employee privacy laws, specifically salary history bans.
Up until recent years, employers may have legally obtained a job applicant’s salary history. In most states, you were allowed to ask candidates about their current salaries or pay at previous jobs. But now, as the national focus continues to shift the spotlight further onto the gender wage gap and other pay-related discrimination, there are many local and state-level bans on requesting an applicant’s pay history.
At Barada Associates, we specialize in comprehensive background screening services that benefit your hiring process, while also remaining compliant with every salary history ban guideline for both private and public employers. When you work with our team of experts, we will educate you on the pay history laws in your area, as well as any more bans that could be on the horizon.
Check out this guide, where we walk you through everything your company needs to know about salary history bans to protect your hiring screening process and still ensure well-informed hiring decisions can be made. When you’re ready to take the next step with effective background checks, contact Barada Associates.
What are Salary History Bans?
A salary history ban is a law that prohibits employers from asking applicants about their current or past salary or benefits. It also generally prohibits employers from seeking this information through an agent or from sources other than the applicant, such as the applicant’s former employers.
Here’s a more detailed list of sources a salary history ban prohibits employers from checking with to confirm pay history:
- The applicant
- An applicant’s current or former employer
- A candidate’s former employees
- An agent of the applicant’s current or former employer
- Publicly available records or reports
The Difference Between a History Ban & Legal Salary Discussion
It’s important to understand that a ban on wage or salary history doesn’t apply if an applicant decides to provide pay history voluntarily, or from negotiating and determining salary for the position your company is hiring for. If your company operates in a state with pay scale history bans, you can still discuss applicants’ pay expectations in the interview process.
You can offer the position’s pay scale, so candidates can decide if the monetary offer meets their minimum or maximum criteria. This way both employment agencies and applicants can have the same expectations for the job and know if it’s a right fit from the start. For your company, initiating these transparent conversations will allow you to identify and quickly weed out applicants with unrealistic expectations or whom you can’t afford to hire.
The Pros & Cons of Blocking Access to Pay History
Knowing the history of a job applicant’s wage can bring some benefits to hiring parties. But pay history ban laws aren’t all bad, especially from the perspective of a job applicant. Below are the pros and cons of these sometimes controversial laws.
We know it has long been illegal for employers to pay different wages to men and women for the same work. However, a significant pay gap still exists. According to a report from the Bureau of Labor Statistics, women earned 82% of what men earned in 2016. For minority women, the pay gap is even more pronounced.
Salary history bans were designed to address this gender pay inequality by simply paying applicants based on their experience, skills, record of success, and other related factors represented on their resume and application.
These bans have also helped employers by diversifying their talent pools. In the past, some highly qualified candidates may walk away from a company that requests job applicants’ salary history, meaning you miss out on the best people for your business.
For employers, the disadvantages of not being able to ask for a candidate’s pay history seem quite lofty.
Without salary history information, the burden on employers to provide sufficient evidence in cases of differing compensation between similarly ranked employees is much heavier. It can also make offering a comparable, affordable salary for new positions more difficult if you don’t know what ballpark your candidates are already working within.
Are You Affected by Salary History Bans?
As of August 2023, there are 22 statewide bans and 22 local laws blocking employers from inquiring about job applicants’ previous pay. The locations of these bans include:
- San Francisco, CA
- District of Columbia
- Chicago, Ill
- Louisville, Kentucky
- New Orleans, Lousiana
- Montgomery County, MD
- Jackson, Mississippi
- Kansas City, Missouri
- St. Louis, Missouri
- New Jersey
- New York
- New York City, NY
- Albany County, NY
- Suffolk County, NY
- Westchester County, NY
- North Carolina
- Columbus, OH
- Toledo, OH
- Philadelphia, PA
- Pittsburgh, PA
- Puerto Rico
- Rhode Island
- Columbia, South Carolina
- Richland County, South Carolina
- Salt Lake City, Utah
While the number of state and local governments adopting laws and regulations surrounding compensation history continues to increase, two states have actually passed bans on the history bans.
In 2018, both Wisconsin and Michigan passed laws prohibiting local governments from banning employers’ rights to solicit salary history from prospective employees. In 2019, Michigan updated its legislation to allow salary history requests only once a conditional offer of employment had been extended.
To view an interactive list of all the U.S. territories with laws relating to compensation history bans, visit hrdrive.com.
How to Conduct Effective Background Screening Without Interfering with Salary History Laws
If your company is subject to any of these laws, the first thing you should do is contact the national employment screening experts at Barada Associates. We will assist in your hiring process while also reducing the risk of litigation to your company by avoiding the violation of any compensation history laws.
Our Hiring Process Checklist
At Barada Associates, our background screening specialists recommend the following steps to help you remain in compliance with salary history bans.
- Review existing recruiting and onboarding policies, practices, and procedures to ensure compliance with the specific provisions and prohibitions outlined in these FAQs.
- Review all existing job applications to ensure those documents do not contain any requests for applicants to disclose their salary histories during the hiring process.
- Provide FAQs to recruiters and other personnel involved in interviewing and onboarding to ensure they are not asking (or otherwise prompting) candidates to disclose salary history.
- Train recruiters to focus on an applicant’s salary requirements and expectations versus salary history, emphasizing the company determines a salary range based on experience, merit, and education.
- Refrain from any conduct that could be construed as a refusal to hire an applicant based upon his or her failure to provide a salary history.
- Educate yourself and your staff on equal pay laws and general hiring regulations in your area to ensure a productive, legal hiring process from the job posting to the offer of employment.
Whether or not your jurisdiction is covered by the new laws, the trend of avoiding salary history discussions seems to be taking hold across the country. Similar measures are under consideration in a number of additional jurisdictions, and it may only be a matter of time before your state or community joins this growing list.
For assistance navigating or preparing for the implementation of these laws in your areas, choose Barada Associates. Give us a call today for a free consultation on how our background screening services can ensure you hire the best candidate for your job.
Contact Barada Associates Today
Navigating laws that prohibit employers from collecting previous salaries from applicants can be frustrating and confusing. At Barada Associates, we have 40 years of experience ensuring employers remain compliant will all kinds of hiring regulations, including salary history bans.
With our background screening services, you won’t have to seek pay history in your job postings or interviews to employ applicants who will succeed beyond your expectations. We screen applicants based on a variety of background checks, such as criminal history screening, drug and alcohol testing, and academic verification. Contact Barada Associates today for comprehensive hiring solutions.