Salary History Bans: What You Need to Know

Are you thinking about asking your candidate questions regarding their salary history?

You may want to reconsider doing this.

Several states have already made the decision to implement salary bans.

According to HR Dive:

The laws are aimed at ending the cycle of pay discrimination and some go further than merely banning pay history questions. A few also prohibit an employer from relying on an applicant’s pay history to set compensation if discovered or volunteered; others prohibit an employer from taking disciplinary action against employees who discuss pay with coworkers.

The specific salary ban laws vary by state.

Some states have issued a statewide ban, while others have limited the ban to a specific city within the state.

For example, as of right now, Michigan has not issued a statewide salary ban.

According to Michigan Legislature, “A local governmental body shall not adopt, enforce, or administer an ordinance, local policy, or local resolution regulating information an employer or potential employer must request, require, or exclude on an application for employment or during the interview process from an employee or a potential employee.”

This law has been effective since June 24, 2018.

In this case, the local government cannot force employers to follow a certain rule pertaining to what they can or cannot ask for employment determination.

However, a new salary ban law was recently enacted on January 8, 2019.

This law only affects state departments and certain autonomous agencies.

According to Michigan.gov, the new law prohibits state departments and autonomous agencies from asking questions about a candidate’s current and previous salary “unless and until the department or agency first makes a conditional offer of employment.”

Also, state departments and autonomous agencies cannot “Make inquiry of a current or prior employer or search public records databases to ascertain an applicant’s current or previous salary.”

The law goes on to also include the following directives:

• Avoid learning and using an applicant’s salary history while gathering their information
• Request and verify an applicant’s salary history “if the applicant voluntarily provides the information or if verification is required by applicable law.”
• If state departments and autonomous agencies already have an applicant’s salary compensation at the time of this new law, “it shall not use that information in any employment decision unless required to by law or a collective bargaining agreement.”
• An applicant’s refusal to voluntarily share their salary compensation cannot be used against them when making the hiring decision.

You can view additional directives of this law on the Michigan.gov site.

If you have any questions, feel free to contact us and we’ll be glad to help.

Disclaimer:

The Orsus Group blog is provided for informational purposes only. It is not intended to be comprehensive, and is not a substitute for and should not be construed as legal advice. The Orsus Group does not warrant any statements in this blog. Any statutes or laws cited herein should be read in their entirety. You should direct to your own experienced legal counsel questions involving your organization’s compliance with or interpretation or application of laws or regulations and any additional legal requirements that may apply.