In a trend that is increasingly taking hold in the U.S., the San Francisco city council last week passed an ordinance prohibiting employers who do business in the city from inquiring about salary history from job applicants. San Francisco joins other major cities such as New York City and Philadelphia in this trend. The ordinance awaits signature by the mayor.
As we have reported before, laws which prohibit employers from asking about salary history are designed to eliminate perpetuation of the wage gap between genders. Even today, women still earn less than men in virtually all segments of the workforce. Many believe that this gap is perpetuated, in part, because employers base starting salaries on a candidate’s salary history, lowering the starting pay offer for applicants who were earning less at their last jobs than other candidates or employees. Since men still generally earn more than women, basing starting pay on a candidate’s salary history will maintain this wage disparity. The logic in prohibiting questioning job applicants on salary history is, of course, that if an employer doesn’t know what a candidate earned in the past, then that employer will offer a salary commensurate with the job, and not commensurate with the candidate’s job history, thus closing the gender gap.
Unequal pay based on gender has been prohibited by the Equal Pay Act for decades. Recently, courts have seen an uptick in claims based on this Act, specifically in professions, such as the law, where it has long been thought that salaries are tied to merit and bringing in business, rather than gender.
One major obstacle to laws limiting inquiries on salary history is their possible infringement on free speech. No other employment law actually prohibits an employer from talking about specific topics. While many people believe, for instance, that in protecting employees against age discrimination that Title VII prohibits an employer from asking a candidate or employee about their age, the law carries no such specific prohibition. Rather, the EEOC or a court may find that an employer’s inquiry about the age of an applicant, coupled with an adverse action, like that individual not getting the job, is evidence of age discrimination. The inquiry itself does not violate the law, but if a negative outcome occurs after that inquiry, then a court may conclude that the two were connected. That’s why employment lawyers advise employers to avoid those kinds of questions from the start. On the other hand, salary inquiry prohibitions actually prevent employers from even asking about salary history, although it is not unlawful for applicants to voluntarily reveal this information. This may indeed amount to an unlawful restraint on speech. Currently, Philadelphia’s law is on hold, amidst just such claims.
We’ll keep you posted on this trend and the challenges that it faces.