Answer:
These days, doing so may open the door to trouble. You may have read about various legislation being proposed and adopted in various cities and states about salary histories. If your business operates in a location that has not yet passed such a law, employers are left to wonder whether asking an applicant about their salary history is still fair game in the hiring process.
The 9th Circuit Court of Appeals, which covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington, recently shed some light on this issue. The 9th Circuit held that prior salary history cannot be used to justify differences in pay between male and female employees. The Federal Equal Pay Act generally prohibits companies from paying employees doing the same job different amounts, unless the wages are based on a merit or seniority system, or if the wages are determined based on the quality or quantity of work, or “any other factor other than sex.” This quoted exception was what the 9th Circuit was focused upon. The Court held that this catchall language cannot be construed to justify setting salaries based on prior pay given that the prior pay reflects “. . .a discriminatory marketplace that valued the equal work of one sex over the other.”
This decision is expected to be appealed and several other gender-pay cases are pending across the country. So stay tuned for further direction. Meanwhile, if an employer asks a question about salary history, then the information is known and the applicant could infer that an employer used that information in setting compensation. Opening this door may not be worth it given the way these cases and the laws are trending. For more information on this topic, see my prior post here.
About the author: Laura Liss is Chair of Patzik Frank and Samotny’s Employment Law Practice Group. She provides both legal and practical business advice on all phases of employment-related decisions. She regularly serves as a sounding board for business owners, executives and human resources professionals and assists them in successfully and efficiently navigating the various employment laws that affect their businesses.
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