Oregon has passed legislation prohibiting employers from screening job applicant based on their salary history. On June 1, 2017, Governor Kate Brown signed into law the Oregon Equal Pay Act of 2017. Section 4 of the law will make it unlawful to screen job seekers based on current or previous compensation before a conditional job offer has been made. Employers may still review an applicant’s employment history as part of the screening.
The law is aimed to reduce pay gaps between race, genders, and other protected classes. Employees can seek relief by engaging the Oregon Bureau of Labor and Industries, or they can sue the employer directly for unpaid wages. The act does provide relief for employers if they can demonstrate:
1. An equal-pay analysis has been conducted in good faith to assess and correct wage disparities among employees who perform work of comparable character within three years of the action.
2. The employer has made reasonable and substantial progress toward eliminating wage differentials for the protected class asserted by the plaintiff.
City of New York passed similar legislation on May 4, 2017, which prohibits employers with four (4) or more employees from asking job applicant’s current or prior compensation. Specifically the law makes it a discriminatory practice for an employer to:
1. Inquire about the salary history of a job applicant.
2. Rely on the salary history of an applicant when determining the applicant’s salary, benefits, or other compensation during the hiring process, unless the applicant “voluntarily and without prompting” discloses his or her prior salary information.
Employers may ask job applicant about their salary “expectations” and other compensation. Employers may still conduct employment verification as part of the background check, however they must not use previous salary information as part of the new compensation.
What should employers do now?
Contact your background screening vendor to ensure you are not verifying wages in the city of New York or the state of Oregon. Additionally, employers should remove the question inquiring about salary history on the employment application.