Maryland employers will be prohibited from requesting or relying on a job applicant's wage history to make decisions about employment or initial pay rates, beginning Oct. 1.
We've rounded up resources and articles from SHRM Online and other outlets to provide context.
Provisions of the Law
The new law imposes several restrictions on inquiring about or using salary history in the hiring process, including requesting or seeking an applicant's wage history, either directly from the applicant or indirectly, and prohibits relying on the wage history of an applicant.
Once an initial offer of employment and compensation is made, however, employers may rely on any wage history voluntarily provided by the applicant to support a higher offer.
Maryland employers must also provide applicants with the wage range for an open position upon request.
SCOTUS Passes on the Issue
The U.S. Supreme Court in July declined to review lower courts' split decision over whether prior salary is a "factor other than sex" that can justify a pay disparity under the federal Equal Pay Act, which requires "equal pay for equal work regardless of sex."
More Jurisdictions Are Banning Salary-History Inquiries
A number of states and localities have enacted prohibitions on asking job candidates about their pay history, though these prohibitions vary in terms, scope and applicability. Additionally, some states and localities ban salary-history inquiries from public employers only.
SHRM: Employers Use Pay History to Stay Competitive
The Society for Human Resource Management (SHRM) stated that employers, acting in good faith, should have the ability to set salaries based on business and organizational needs and that employers use pay history to make attractive offers and to keep their own pay structure competitive, among other legitimate purposes.
Pay Transparency Fosters Gender Equity
The pay gap between men and women disappears for most jobs when employers adopt transparent pay practices, research shows. Compensation data and software firm PayScale examined a comparison of pay for men and women with the same experience and education doing the same job in the same geographic location, finding that women earn 98 cents for every dollar earned by men. However, when employees said they have a transparent pay process at their company, women were estimated to earn between $1 and $1.01 for every dollar men earn—effectively erasing the gender pay gap.
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