Could They Be At Risk?
In what may be a signal of a provocative trend in the workplace, on September 14, 2016, Congresswoman Eleanor Holmes Norton of the District of Columbia introduced a bill in Congress entitled the “Pay Equity for All Act of 2016” (the “Act”). Under the bill as introduced, the Fair Labor Standards Act (“FLSA”) would be amended to now prohibit employers from asking applicants information related to their prior salary history, including benefits and other “compensation”. The proposed legislation would also prohibit any employer from using any other public source of such information to ascertain prior salary history.
There are monetary penalties under the proposed law for any employer who would violate its provisions, as well as monetary damages and attorneys’ fees granted to the prospective employee who has allegedly been damaged by the employer’s noncompliance with the stated statutory scheme.
In introducing the proposed legislation Congresswoman Norton posited that such legislation would “help eliminate the gender and racial pay gap” and would “ensure that applicants’ salaries are based on their skills and merit, not on a potentially problematic salary history.” [whatever that means!]
Significantly, the legislation that Congresswoman Norton introduced comes on the heels of a more extensive bill that was enacted in Massachusetts on August 1 of this year, to be effective on July 1, 2018, entitled “The Act to Establish Pay Equity”. Under the Massachusetts statute employers, among other things, would also be constrained in asking prospective employees about their past salary history. Moreover, the New Jersey State Assembly is presently considering similar statutory restrictions on the ability of an employer to access past salary history of applicants as part of the hiring/screening process.
While it seems doubtful that Congresswoman Norton’s bill will pass anytime soon, the idea that an employer may not be able to access prior salary history is problematic. It is usually deemed relevant to observe how, if at all, a prospective employee has progressed in his/her career, both in responsibilities and in compensation. Additionally, prior compensation history is frequently important in the establishment of initial salary for the applicant who is eventually hired. Employers already feel constrained by the numerous areas of inquiry to job applicants that are presently out-of-bounds due to federal, state or local applicable workplace statutes. Adding another limitation on questions relating to salary history will just make it ever-more difficult for the discerning employer to evaluate the candidacy of its applicants.
As with any pending legislation of this type – Stay Tuned!
ABOUT HOWARD KURMAN
Howard K. Kurman is an employment attorney. Mr. Kurman regularly counsels clients on all aspects of proactive employment/labor issues. He represents employers ranging in size from as small as 20 employees to those employers with geographically disparate locations consisting of over 4,000 employees. Mr. Kurman assures, through regular contact with his clients, that they promulgate and maintain the most effective employment policies that will, to the extent possible, minimize their legal exposure in today’s litigious workplace. Mr. Kurman offers advice on employee handbooks, employment agreements, and covenants not to compete as well as confidentiality and non-disclosure agreements. Previously, Mr. Kurman was the chair of the firm’s Labor & Employment Practice Group.
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