North Carolina Bans Agencies to Ask Salary History

North Carolina Governor Roy Cooper has signed an executive order banning state government agencies from using a job applicant’s salary history to determine their wage.

Under Executive Order No. 93, “Prohibiting the Use of Salary History in the Hiring Process,” public employers must remove salary history inquiries from employment forms. The order also mandates that state government agencies may not rely on previously obtained salary information in setting a job applicant’s salary.

Because state employee salary history is a public record, the Office of State Human Resources is required under the order to use its best efforts to make sure previous salary information is not used in a discriminatory way.

The move is aimed at eliminating the salary gap between men’s and women’s salaries. Women in North Carolina earn less money than men — about 19% less than men on average, according to a fact sheet from the governor’s office.

Median earnings for men in the state are $45,000 while women in the state earn just $36,400. The gap is even wider for women of color.

“Women have strengthened our state and our country for generations, but an unfair wage gap continues to hurt women workers — especially women of color,” Governor Cooper said in a news release.

Noting that women get paid less with their first job and that reporting salary history may continue to perpetuate gender pay inequities, banning the use of previous salary information during the hiring process can help close the gender pay gap for women, the governor says in the order.

Relying on salary history can perpetuate the pay gap, starting with the first job and continuing throughout a women’s career, based on assumptions that the prior salary was fair or free from bias.

State entities not subject to the governor’s oversight, along with counties, municipalities, political subdivisions, local government entities and private subdivisions are not required to comply but are encouraged to do so, according to the order.

The Democratic governor signed the order on April 3. It went into effect immediately.

The governor has also proposed a salary adjustment fund to help promote gender and racial pay equity in state government hiring, according to the order.

Other salary history bans

Many states and local jurisdictions are moving forward to eliminate gender pay inequity by passing their own laws that ban reliance on previous wage history even as federal efforts stall.

Eighteen states, including Utah, Washington state, Oregon, and California, as well as 16 local jurisdictions have salary bans in place. The bans prohibit employers from requesting salary history information from job applicants. Some bans go even further and forbid employers from relying on prior pay history when determining compensation even if the information has been volunteered or discovered during the hiring process. Some of the bans only apply to government employers.

This year alone, several states and municipalities have banned employer inquiries into previous pay:

• On March 13, the Cincinnati City Council voted to prohibit employers from asking job applicants for their salary history as of March 2020.
• In April, Maine’s legislature passed a salary history ban.
• On May 9, Washington state’s governor signed a bill forbidding employer inquiries about previous salary history that became effective July 28, 2019.
• Colorado Governor Jared Polis signed a salary history ban on May 22 as part of the state’s equal pay legislation that applies to both private and public employers regardless of size and that goes into effect on Jan. 1, 2021, unless a referendum petition is filed.
• In June, Kansas City, Missouri passed a salary history ban. Several other states are also taking a look at putting salary history bans in place.

On the national front, “The Paycheck Fairness Act,” that would create a nationwide prohibition on employer inquiries into previous wages, has been under consideration on Capitol Hill. But, while the U.S. House of Representatives quickly approved the measure, a companion bill in the U.S. Senate hasn’t received much consideration since its introduction in January 2019.