Labor & Employment / 07.11.2019

Soccer, Salary History Bans, and Sizing up Equal Pay

By Rob Gilmore and Kirsten Mooney

The U.S. Women’s National Team (“USWNT”) has won the World Cup for the second time in a row, but the real battle may be yet to come. The USWNT is currently suing their employer, the U.S. Soccer Federation, alleging the entire team is paid less than its male counterpart, taking into consideration total revenue, net revenue and individual earnings for the USWNT, as compared to the U.S. Men’s National Team. As the USWNT continues in their unquestionable success and their voices only gain traction, political bigwigs, including Democratic presidential primary candidates Elizabeth Warren and Kirsten Gillibrand, as well as President Donald Trump himself, have taken sides in their very public battle for pay equality.

As this fight continues in the world of soccer and plays out on social media, several states may be taking a hint. State and local governments have continued to adopt new laws or regulations, in part to curb perceived pay inequality in the workplace. We all know that it has long been illegal for employers to pay different wages to men and women for the same job – even in professional sports. That is considered discrimination in its purest form. However, some studies still show a substantial pay gap exists – again, even in professional sports. According to the most recent report from the Bureau of Labor Statistics, for the first quarter of 2019, women earned approximately 80 percent of what men earned.

These new state and local laws or regulations, known as “salary history bans,” specifically forbid employers from asking questions about an applicant’s salary history, and some even prohibit employers from relying on an applicant’s salary history when hiring. Proponents of these bans argue that inquiring about past compensation for future employment decisions only perpetuates existing pay disparities among men and women, and prohibiting these inquiries altogether may support a clearer road to pay equality.

Currently, 18 states and 17 localities have enacted such bans. And, as of May 2019, Maine and Washington have become the most recent states to enact a salary history ban for employers. The following are some of the most recent states and localities to adopt such laws (and a few details of each):

  1. Alabama (effective date September 1, 2019): Alabama employers may not refuse to hire, interview, promote or employ a job applicant based on the applicant’s decision not to provide pay history. All employers, regardless of size, are affected by this law.
  2. Colorado (effective date January 1, 2021): Colorado employers may not ask about an applicant’s pay history, rely on pay history to determine wages or discriminate or retaliate against an applicant for failing to disclose his or her pay history. All employers, including the state and any political subdivision, are affected by this law.
  3. Maine (Effective Date September 17, 2019): Maine employers are prohibited from asking applicants about their compensation history until after a job offer has been negotiated and made, including all terms of compensation. Maine employers are also prohibited from asking an applicant’s former or current employer for salary information. The Maine law has exceptions for when an applicant voluntarily discloses his or her salary history, or when an employer must inquire about compensation “pursuant to any federal or state law that requires the disclosure or verification of compensation history for employment purposes.” The Act applies to all Maine employers.
  4. Ohio: The cities of Cincinnati and Toledo have enacted salary bans. Cincinnati’s law, effective March 2020, applies to employers with 15 or more employees located within the city, but excludes state and local governments (other than the City of Cincinnati). Cincinnati employers may not ask applicants about their salary history and may not rely on known salary histories. The Cincinnati law includes a little twist, however – employers must, upon a reasonable request, provide a pay scale for a position when an applicant has been provided a conditional job offer.
    Toledo’s law, effective June 25, 2020, applies to employers located within the city of Toledo that employ 15 or more employees, including the City. The law prohibits Toledo employers from asking or screening job applicants based on salary history. Employers may not require that an applicant’s pay history, benefits or other compensation satisfy minimum or maximum criteria. However, the law does allow an employer to discuss an applicant’s pay expectations.
  5. Washington (effective July 28, 2019): Washington employers may not seek pay history from applicants, but can confirm pay history information if the applicant voluntarily discloses it or an offer has been extended. Employers with 15 or more employees have an additional obligation – they must provide, upon request of the applicant and after extending an offer, information about the minimum salary for the position for which the applicant is applying.

Please note that this is not a complete overview of each law, but rather a brief summary. You should review the statutory or regulatory language for the various details of each.

On the other hand, two states, Michigan and Wisconsin, have enacted converse laws, prohibiting such salary history bans. This means that employers in these states are allowed to inquire about an applicant’s salary history during the hiring process.

It is yet to be seen if the USWNT will prevail in their lawsuit. However, it appears that these salary history bans are here to stay. As several states enact these bans, and other states consider such legislation, employers and human resources representatives should begin paying attention to this growing trend. It may only be a matter of time before your city or state is next.

For more information on how to prepare for a salary history ban in your state, contact Rob Gilmore at rsg@kjk.com or 216.736.7240, Kirsten Mooney at kbm@kjk.com or 216.736.7239, or reach out to any of KJK’s Labor & Employment professionals.

 

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