Equal Opportunity For All
Equal Pay For Equal Work Regardless Of Gender Or Race
Policy Library

Stop the Unfair Pay Gap Cycle

Race and gender pay gaps persist across the United States. Women make an average of 80 cents to a man’s dollar—a 20% wage gap. And the pay gap between the highest- and lowest-earning workers by gender and race is closer to 50% in many states. To ensure equal pay for equal work, one step is to limit employers’ ability to ask about previous salary. The Salary History Fairness Act ends the cycle of pay discrimination by preventing employers from asking prospective employees about their salary history.

The National Landscape

Passed in:

Massachusetts, California, Connecticut, Delaware, Hawaii, Oregon, Vermont

In The News

“The ‘What were you making at your last job?’ question can haunt women far into the future... ‘It's a question that can lead to ongoing discrimination... You can see how discrimination at one point in time can have trailing effects that would be damaging.’”
“‘The gender pay gap starts after graduation...Women in the workforce are coming into salary negotiations behind. Offers are calculated largely—not solely—but largely based off of what that candidate is currently earning.’”
“Big companies like Amazon Inc., Bank of America Corp. and Wells Fargo & Co. say they have instructed recruiters not to ask about salary or benefits a candidate received in other positions, as more employers shift away from using past wages as a guide for setting their future pay. The move stems from a slew of new laws around the U.S. aimed at closing wage gaps in the workforce.”

Partners

  • Workers
  • Advocates for women and people of color
  • Fair pay advocates

Opposition

  • Business federations seeking to use prior salary history to set compensation
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FAQ

Who does this help?
This bill prevents employers from asking prospective employees about their past salary, or using that information as a screen for new employees. Since women and people of color have historically earned less for similar work, basing salaries on past pay perpetuates these pay gaps. Pay at a new job should be based on the job, not based on an applicant’s past earnings.
Why is this important?
Research has shown companies with more women in senior positions earn 19% higher equity return and 15% higher net revenue margins. These statistics highlight pay equity can improve the bottom line for businesses and employees.
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Model Policy

SECTION 1 (TITLE):
This act shall be known as the Salary History Fairness Act.

SECTION 2 (PURPOSE):
This act amends the Labor Law to establish pay equity by limiting inquiries about salary history.

SECTION 3 (PROVISIONS):

(a) Definitions. (1) “Applicant” means a prospective employee applying for employment. (2) “Compensation” includes monetary wages as well as benefits and other forms of compensation.

(b) It shall be an unlawful employment practice for an employer or an employer’s agent to: (1) Screen applicants based on their compensation histories, including by requiring that an applicant’s prior compensation satisfy minimum or maximum criteria. (2) Seek the compensation history of an applicant from the applicant or a current or former employer for the purpose of setting compensation to be offered to an applicant.

(c) For the purposes of this section, if the employer can demonstrate that the employer’s agent was informed of the requirements of this section and instructed to comply, then the employer is not liable for actions taken by an agent in violation of this section, unless there is a finding of a repeat violation with knowledge of the employer.

(d) Nothing in this section prohibits an employer or an employer’s agent and an applicant from discussing and negotiating compensation expectations provided that the employer or employer’s agent does not request or require the applicant’s compensation history as part of that process.

(e) Nothing in this section prohibits an employer or an employer’s agent from seeking the applicant’s compensation history after an offer of employment with terms of compensation has been extended to the applicant and accepted.

(f) Enforcement. The Department of Labor has the power to enforce this section.

(g) Penalties. (1) Any employer who violates or fails to comply with any requirement of this section shall be deemed in violation of this section and shall be subject to a civil penalty of not less than $1,000 nor more than $5,000 for the first offense and not less than $5,000 nor more than $10,000 for each subsequent violation. (2) For penalty purposes, any actions by an employer or employer's agent that violate the provisions of paragraphs (b)(1) or (b)(2) of this section that pertain to interviewing and hiring for a single position shall constitute a single violation. (3) A civil penalty claim may be filed in any court of competent jurisdiction.