Employers often seek wage history information from job applicants and then use that information to determine an employee’s starting salary. A newly introduced house bill would end this practice and levy penalties against employers who continue to request an applicant’s wage history. So why the push to end this decades-old practice? Advocates of the change argue that use of an applicant’s wage history only serves to perpetuate the gender and racial pay gap. H.R. 6030 aims to close the gap.
On September 14, 2016, Representative Eleanor Norton introduced H.R. 6030 – the “Pay Equity for All Act of 2016” to the United States House of Representatives. The purpose behind H.R. 6030, according to Rep. Norton, is to “help eliminate the gender and racial pay gap.” The rationale is that when employers are prohibited from asking about or seeking information related to previous salaries, they would have no choice but to offer pay and benefits based on their opinions about the position and the candidate.
According to the AAUW and the National Partnership for Women & Families, Kansas is ranked 37th in the United States for the gender pay gap with women averaging 77 cents to a man’s dollar. Many researchers and reports suggest that often the wage gap is due to an unconscious bias towards women. Additionally, current statistics suggest that despite current laws and regulations, women and men will not reach equal pay until 2059.
While H.R. 6030 is currently in the House Committee on Education and the Workforce, employers should monitor its progression. H.R. 6030 would amend the Fair Labor Standards Act of 1938 to prohibit employers from asking prospective employees about their previous wages or salary histories, contacting any prospective employee’s current or former employer to seek previous wage information, or asking about other benefits. Additionally, the Act would prohibit retaliation against any current or prospective employee who made a complaint, testified, assisted, or participated in an investigation relating to any act or practice prohibited by H.R. 6030.
The Act also gives the United States Department of Labor (“DOL”) some teeth with regard to enforcing H.R. 6030. The DOL would have the authority to fine employers who violate the law up to $10,000. Also, the Act gives prospective or current employees a right to sue the employer if it violates the law and allows recoveries up to $10,000 in damages plus attorney fees.
In the meantime, employers should run internal audits to determine whether they have unexplained pay gaps between their workers. This could prevent future problems with H.R. 6030, if it becomes law, or with other discrimination claims. We, here at Joseph, Hollander & Craft, will continue to monitor the progression of H.R. 6030 and answer any questions that may arise.