Question: Should employers ask about salary history in the hiring process?

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.

Question: Is it unlawful to make hiring decisions based on an applicant’s looks?

Answer:

No, discriminating based on a person’s appearance generally is not unlawful, but it is not a good hiring practice.  NBC recently learned this the hard way when it was sued by a former employee who brought claims against NBC for disability discrimination and sexual harassment.  The employee included allegations in the lawsuit that “When she was first contacted by a recruiter for the job with NBC, she was told NBC specifically asked for good-looking employees,” and that “She was therefore asked to show her Facebook/Instagram profile to NBC before she could be interviewed.” (See Stephanie Belanger v. NBC Universal LLC, filed this summer in New York state court.)

While employment discrimination based on an applicant’s attractiveness is not illegal on its face under current federal or state law, hiring decisions based on looks could implicate other types of discrimination, such as age, disability, sex, race, national origin or religion.  For example, consider what you may learn or infer about these attractive people from a photograph:

In addition, be aware that some local laws, such as the Washington DC Human Rights Act, prevent discrimination based on personal appearance.

Aside from potential legal risks, you also may not want to be known as the company with the (actual or perceived) anti-ugly policy or, as a Panera franchisee faced in litigation a few years ago, a company that prohibits “black, fat or ugly” people from working in public-facing positions.  In limited circumstances (think fashion or Hollywood), appearance standards may be a bona fide occupational qualification.  However, in most industries, companies should avoid focusing on an applicant’s appearance and stick to hiring the most qualified person for the job.

About the Author:  Laura Liss (lliss@pfs-law.com) 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 impact their businesses.

Question: Do on-campus recruiting programs put companies at risk of age discrimination claims?

Answer:

Well, that remains to be seen, but there seems to be a shift in that direction. While job applicants can sue for intentional discrimination because the Age Discrimination in Employment Act (ADEA) prohibits an employer from “failing or refusing” to hire individuals because of their age, there is an open question as to whether job applicants can sue for unintentional discrimination if a facially neutral policy (like an on-campus recruiting program) adversely affects someone age 40 or over. In other words, it remains unclear whether applicants age 40 or over can sue employers who recruit from business schools, law schools or other on-campus programs because the employers’ focus on recent graduates necessarily has a disparate impact on older applicants.

There are a few recent court cases that have had opposite outcomes (one court that allowed such a claim and another that denied such a claim), but both cases turned on the same plain language of the ADEA.  Perhaps the Supreme Court will take up this issue to resolve the uncertainty.  In the meantime, we can expect to see more cases along these lines given this ambiguity in the law.  And we needed another type of claim to worry about, right?

Employers most certainly will continue to recruit on campuses, but employers should make sure they can articulate legitimate business reasons for such practices.  As long as there are reasonable factors other than age, such as wanting lower salaried employees with no experience in entry-level positions who need training to build skills and knowledge and to learn your culture and way of doing business, then your recruiting program should be defensible.  Some employers might be more subtle and indicate a preference for applicants who went through a particular program only offered in college, and which was only recently available. Whatever your non-discriminatory reasons are, be sure your records support them.

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 impact their businesses.

Question: Can employers ask job applicants about their current salary?

Answer:

Well, it depends on where you are located, but this increasingly is becoming a risky proposition in the hiring process.  Many cities and states have passed laws prohibiting private employers from asking candidates in the hiring process about their salary history.  New York City just passed such legislation.  Massachusetts passed a law that takes effect in 2018 and several other states, including Illinois, are considering following suit.  These laws are part of an effort to ensure pay equity for women.  The rationale is that employers necessarily will take a candidate’s salary history into account in setting the employee’s starting pay.  Given that women often earn less than men, this can perpetuate the pay disparity.

The salary history ban typically is part of a broader law that prevents employers from underpaying women.  Generally these laws do not prohibit employers from asking about an applicant’s expectations with respect to salary, benefits or other compensation, provided that they do not get into the applicant’s compensation history.  This can be tricky to navigate, so tread lightly in this area.

Employers should be cognizant of the growing trend towards prohibiting inquiries into an applicant’s salary history.  Employers may need to remove salary history questions from their job applications and ensure that those who participate in the hiring process are aware of the potential ban on asking applicants compensation related questions.

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.

Question: What are common mistakes employers make with their Employment Applications?

Answer:

Some companies fail to realize the value of a good Employment Application. The Employment Application (and a company’s other onboarding documents) serve as part of a mutual introduction of an applicant to the company and the company to the applicant. You want to put your company in the best possible light by asking professional questions that are current, legal, and well-organized. Likewise, you want to ask questions that will ensure you get the best information possible to help you recruit and hire the best possible candidates for your workforce.

Here are 10 common mistakes on Employment Applications:

1. Asking for protected information, such as date of birth, marital status, dependent information, social security number, national origin, race, gender, religion or sexual orientation;
2. Asking for years of graduation (which will give a good idea of the applicant’s age);
3. Including a question about the applicant’s criminal background that is not compliant with applicable law (the “ban the box” laws are ever expanding);
4. Not getting the information you need to assess an applicant. For example, if the job requires travel or regular overtime work, ensure you are determining the applicant’s willingness and/or ability to do so;
5. Not requiring the applicant to fill out all of the information on the Employment Application, but instead allowing them to submit a resume (there are often inconsistencies, which can turn out to be telling);
6. Not including a statement before the applicant’s signature at the end of the application that attests to the truth of the information provided and the fact that the applicant did not withhold any information that would, if disclosed, effect the application unfavorably;
7. Not including an EEO statement (or using one that is out of date);
8. Not asking the “reason for leaving” each employer in the employment history section;
9. Not including language to help prevent or defend against a wrongful discharge claim (that is, informing the applicant that if any information on the application is found, after hire, to be false or misleading, it will be grounds for termination); and
10. Including questions that were once common and acceptable, but are no longer proper. For example, before the passage of the American’s with Disabilities Act (ADA), it was common to ask whether an applicant (a) had ever received workers’ compensation or disability income payments, and (b) had any “physical defects” (yes, really) which would prevent him from performing some jobs. Asking an applicant questions phrased in this manner today can get you into legal hot water.

As a general rule, if you seek information from an applicant, it will be assumed that you used the information in making the hiring decision. So don’t collect any information that you are not, or should not, be considering. Asking the wrong question, even if it is asked in good faith, can expose you to legal liability. An applicant who sues for failure to hire based on illegal questions may seek compensatory and punitive damages, attorneys’ fees and equitable relief (such as, the job that was denied).

Now, before you go about your day, ask yourself: when is the last time you reviewed your Employment Application? If you hesitated in answering that question, or said more than a year or two, it’s probably a good idea to dust it off and have it reviewed and updated.