HR Compliance

Is it Legal to Request Compensation History during Job Interviews?

By

Jenny Stepp

| Sep 20, 2016

Is it Legal to Request Compensation History during Job Interviews?

On Aug. 1, 2016, Massachusetts’ Gov. Charlie Baker signed a landmark bill that takes a three-part approach to bridging the gender wage gap. The legislation also expands on the definition of comparable work and allows employees to discuss their pay with co-workers and colleagues. Here’s a closer look at this sweeping bill, which goes into effect in 2018.

On a national scale, women working full-time earn 79 cents for every dollar earned by men. To seal the gender wage gap, states – such as California, New York and Maryland – have enacted aggressive equal pay laws. But, the boldest move comes from Massachusetts, which recently became the first state to ban employers from requesting compensation history during the job application and interview process.

Employers Banned from Requesting Pay History Prior to Making Job Offer

Massachusetts’ pay equity bill – which passed by unanimous vote on July 23, 2016 – prohibits employers in Massachusetts from requiring applicants to disclose their pay history on employment applications or during job interviews. Employers can ask such questions only after making a job offer with compensation information. Applicants voluntarily can reveal their pay history during job interviews, but employers cannot seek the information from prospective hires. Massachusetts is the first state to bar employers from requesting pay history during the job application and interview process.

Comparable Work Takes on a Broad Meaning

Under the Equal Pay Act, men and women working for the same employer should receive equal pay for equal work. Massachusetts’ new law also requires that men and women receive equal pay when the work they perform is comparable – which is defined as “work that is substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions.”

Note that employers in Massachusetts are still allowed to consider seniority, experience, education, training and geographic location when determining salaries. In addition, the state recommends that organizations review their compensation structure to ensure employees receive fair wages based on industry standards.

No Retaliation Allowed against Employees Who Discuss Salary with Colleagues

In a 2014 study by the Institute for Women’s Policy Research, around half of respondents said that discussing wages or salary is either discouraged or forbidden at their workplace and could result in punishment. Under Massachusetts’ new law, employees can talk freely about their compensation with co-workers and colleagues, and employers are not allowed to retaliate against those who engage in such discussions. State lawmakers are aiming to increase salary transparency so women and other marginalized groups can more easily determine whether they’re receiving fair wages.

Massachusetts joins a number of states – including California, New Jersey, Illinois and Louisiana – that already allow employees to discuss compensation with each other.

Whether other states will follow Massachusetts’ lead in prohibiting employers from requesting pay history during job interviews remains to be seen. Meanwhile, employers can help close the gender wage gap by establishing compensation policies, practices and procedures that support equality between men and women.

 

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.

About the Author

Jenny Stepp

As a former Paycom HR director and a Human Resource Professional with over 20 years of experience, Jenny has extensive experience in management, mentoring, policy development and recruiting. Jenny's team player mentality and leadership abilities make her an elite HR Director who is always on top of the latest HR trends.

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