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By: Laura S. Flynn
Massachusetts, Delaware, Oregon, California, New York City, Philadelphia and San Francisco have passed laws banning employers from asking applicants about their salary history. The intent behind the legislation is to discourage perpetuation of the gender wage gap. Many employers are unclear as to what they are allowed to ask potential employees.
Generally, an employer can ask an applicant about their expectations in regard to salary, benefits, bonuses and/or commission structures. An employer can inform the applicant of the anticipated salary range for the position. While an employer cannot ask about prior W-2s or earned commissions, they can ask about gross sales or revenue. In California, employers are allowed to ask about any financial benefits an applicant would have to forego in order to take the new job, such as unvested equity or a future bonus. An employer can also ask about competing or counter-offers. In addition to inquiring about skills and prior level of responsibility, the questions asked of an applicant should seek information relating to objective indicators of work productivity. For example, an applicant for a legal position could be asked about her billable hours, her average billable rate, number of trials, and information regarding her client base. The salary history bans may prevent employers from hiring employees at below market rates. However, the anticipated decrease in pay disparities will likely result in an overall economic gain for employers, as the discovery of pay disparities by employees negatively impacts morale, can cause productive employees to leave, and can subject an employer to charges of gender discrimination.
If you have any questions or would like more information, please contact Laura Flynn at [email protected].