Maryland Approves Salary History Ban

Maryland joined 18 other states and 21 local jurisdictions to ban employers from requesting or relying on a prospective employee’s past wages when considering them for a job or determining their pay.

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Maryland employers will soon be prohibited from asking candidates about their salary history

In spite of a legislative session cut short by the COVID-19 global pandemic, Maryland’s legislators managed to pass several significant bills affecting Maryland employers. One of them is a salary history ban that forbids all employers from asking about or even relying on a prospective employee’s past wages unless voluntarily provided.

Under the new laws, Maryland employers — regardless of size — will no longer be able to seek and rely on job applicants’ salary history and will be required to provide job applicants the wage range for a position upon request.

The ban goes into effect on October 1, 2020.

The employer requirements were enacted without Gov. Larry Hogan’s signature.

Maryland wage gap

Salary history bans aim to eliminate the wage gap between men and women. According to the National Women’s Law Center, women in Maryland typically make 86 cents for every dollar paid to white men. The national figure is 82 cents, the organization says. The gap is even worse for members of the minority communities. Black women in Maryland are paid just 68 cents for every dollar paid to white non-Hispanic men, and Hispanic women are paid 46 cents for every dollar paid to white men.

Proponents of salary history bans say women and people of color are paid less than men with their first job and that the salary history gap is perpetuated throughout their careers as most employers base employee compensation on the wages and remuneration received in previous jobs, leaving women and minorities at a longstanding pay deficit.

Opponents of such laws, however, say that salary history inquiries help them weed out applicants. They believe some applicants — based on pay expectations — wouldn’t be a good fit for a job. They also say employers may see a significant increase in hiring costs if they have to match the pay of others.

Black women in Maryland are paid just 68 cents for every dollar paid to white non-Hispanic men, and Hispanic women are paid 46 cents for every dollar paid to white men.

Bill particulars

The ban applies to all Maryland employers. The prohibition also includes the agents of an employer such as recruiters and the applicant’s current and former employers.

Employers may not use the salary history of an applicant for screening or determining the wages of the applicant. They must also not seek the wage history of an applicant orally or in writing for setting compensation.

There are exceptions:

  1. After an employer makes an initial employment offer that includes compensation, the employer may rely on the wage history voluntarily provided by the applicant to support a salary offer higher than the initial wage offered by the employer, or
  2. The employer can seek to confirm the wage history voluntarily provided by the job applicant to support a wage offer higher than the initial wage offer made by the employer
The ban also prohibits an employer from retaliating against, or refusing to interview or hire, an applicant if the applicant will not provide salary information or requests a wage range for the position.
However, there is a condition to the exceptions; an employer may rely on wage history only if the higher wage does not create an unlawful pay differential based on a legally protected characteristic.

Employers must provide a wage range upon request by the job applicant.

The ban also prohibits an employer from retaliating against, or refusing to interview or hire, an applicant if the applicant will not provide salary information or requests a wage range for the position.

Penalties

An employer that violates Maryland’s new salary history ban may receive a:

  • Letter compelling compliance from the Maryland Commissioner of Labor and Industry for a first violation
  • Fine of $300 for each instance of noncompliance for a second violation
  • Fine of $600 for each instance of noncompliance for subsequent violations

The factors in determining the amount of the penalty are the:

  • Gravity of the violation
  • Size of the business
  • Employer’s good faith, and
  • Employer’s history of prior violations

Employers have the opportunity to contest the violations. The penalties are subject to notice and hearing requirements.

Salary history bans 2020

Maryland will join many other states and cities that already ban inquiries into a prospective employee’s compensation. There are 19 statewide bans and 21 local salary history bans, according to HR Dive.

The trend of enacting salary history bans isn’t as strong as it was before the coronavirus occupied lawmakers’ attention; however, salary history bans are still a legislative force with which employers must reckon.

A salary history ban for Toledo, Ohio employers went into effect earlier this summer. Employers within Toledo that have 15 or more employees can’t ask for or screen job applicants based on pay history. However, employers can discuss applicants’ pay expectations.

Cincinnati, Ohio’s salary history ban was expected to go into effect sometime in March 2020.

Philadelphia’s salary history ban was given the greenlight by a federal appellate court in February.

New Jersey’s salary history ban went into effect in January 2020 and New York’s salary history ban also became effective in January 2020.

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