On July 1, 2018, Massachusetts joins a growing number of jurisdictions who have passed pay equity laws which include restrictions or bans on seeking salary or wage history of a prospective employee. Other states, cities and counties with similar restrictions include Connecticut (effective January 1, 2019), Delaware, California, Oregon, Vermont (effective July 1, 2018), San Francisco, CA, New York City, NY, Westchester County, NY, and Philadelphia, PA.
An Act to Establish Pay Equity in Massachusetts (Chapter 177 of the Acts of 2016) amends the Massachusetts Equal Pay Act (M.G.L. c. 149 §105A). Among other provisions, the new law limits employers from seeking current wage or salary information from a prospective employee or their current or former employers unless under certain circumstances. Exception criteria include:
(i) To confirm salary or wage information voluntarily provided by the prospective employee; or
(ii) After an offer of employment where negotiated compensation has been provided to the prospective employee.
New Litigation Developments
There are new litigation developments in this salary ban trend from a recent case out of the U.S. District Court for the Eastern District of Pennsylvania. Set to be effective in May of 2017, the City of Philadelphia attempted to include prohibition on inquiries into wage history and reliance on such information to set future wages through an amendment to Title 9 of The Philadelphia Code.
The judge granted the Plaintiff a preliminary injunction, in part, related to the salary inquiry portion of the Ordinance concluding it violates the First Amendment’s free speech clause.
In Chamber of Commerce for Greater Philadelphia v. City of Philadelphia and Philadelphia Commission on Human Relations, although the judge found that prohibiting inquiries into salary history would violate the First Amendment, reliance on the wage history to determine future wages of a prospective employee does not violate freedom of speech and remains prohibited unless under certain circumstances.
What Does This Mean for My Background Checks?
Notwithstanding the developments in Pennsylvania, barring any further legal developments, effective July 1, 2018, CSI will no longer inquire about previous salary or wage information from current or former employers as part of the employment verification service or process.
What should employers do?
Prior to the effective date, employers should: