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Latest updates: Salary history bans & disclosed salary ranges

1/27/2023

 
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KHS People has previously covered the salary history bans, along with the debate highlights and the impact on hiring managers.

It's timely for a further review as there is now an added step of compulsory salary disclosure in some cities and States.


First, below is a table of the updated various States and cities impacted by region. Note that this table only includes established bans that impact professional services firms.

FIGURE 1: Salary history ban laws in effect

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Secondly, below are the areas that now have salary range disclosure laws in effect. This means that firms must provide the salary range for the role to the applicant.

Some areas have conditions, or quirks, to note about this request.

The biggest region to be included to date is New York City, which is expected to come into effect later this year.

FIGURE 2: Salary range disclosure laws in effect

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Update on the salary history bans

3/17/2021

 
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KHS People has previously covered the salary history bans, along with the debate highlights and the impact on hiring managers. With 2021 well under way, its timely for a further review.

Below is a table of the various States and cities impacted by region.

(Note that this table only includes established bans that impact professional services firms.)
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Hiring managers of BD and marketing professionals, what do the salary history bans mean for you?

5/30/2019

 
(For updates on which States and cities are impacted as at the time of reading this article, please visit this blog for the most up-to-date information: Salary history bans in 2021.)

If you’re a hiring manager in a firm, what does that mean for you with the numerous cities and states that are now impacted by the new salary history bans?
 
Below I set out the three key things you must do as a hiring manager to ensure compliance with the new laws. But first, know which new geographies have been recently added to the list: Kansas City, Washington state, Colorado and Maine.
 
Here is a list of the affected geographies for firms: 

2017:
  • Oregon - October 6, 2017
  • New York City - October 31, 2017
  • Delaware - December 14, 2017
  • Albany County (NY) - December 17, 2017

2018:
  • California - January 1, 2018
  • Massachusetts - July 1, 2018
  • Vermont - July 1, 2018
  • Westchester County (NY) - July 9, 2018

​2019:
  • Connecticut - January 1, 2019
  • Hawaii - January 1, 2019
  • Suffolk County (NY) - June 30, 2019
  • Washington – July 28, 2019
  • Alabama – September 1, 2019
  • Maine – September 17, 2019
  • Chicago – September 29, 2019
  • Kansas City – October 31, 2019

2020:
  • New Jersey – January 1, 2020
  • New York – January 6, 2020
  • Cincinnati – estimated to be March 10, 2020
  • Toledo – June 25, 2020

2021:
  • Colorado – January 1, 2021
 
An important note: the following geographies currently only affect city or state employers. So, not firms. However, precedent would suggest that best practices should be followed as if it did impact your firm; over time similar bans could also be enacted which will impact more than just city or state employees:

2017:
  • City of New Orleans LA - January 25, 2017
  • City of Pittsburgh PA - January 30, 2017

​2018:
  • City of Salt Lake City UT – March 1, 2018
  • City of Louisville KY - May 17, 2018
  • State of Pennsylvania - September 4, 2018

​2019:
  • ​City of Atlanta GA – February 18, 2019
  • State of North Carolina – April 2, 2019
  • State of South Carolina – May 23, 2019
  • City of Jackson MS – June 13, 2019
  • Montgomery County (Maryland) – August 14, 2019
 
As a hiring manager, here’s what you need to do:

  1. Update Internal policies or practices to inform interviewers they must not ask questions relating to salary. These updates then need to be shared with the greater hiring team so each internal hiring manager is educated on the new laws. Also consider whether these best practices should be shared with the partnership, as final interviews are mostly conducted by partners, who may want to discuss salary.
  2. Ensure any automated processes that screen based on salary are removed.
  3. Know your geography and what applies. For example:​ (a) Do you have an office where there are special provisions which impact what to do if a candidate volunteers their salary information? New York City says you still can’t use this information to formulate an offer. Kansas City disagrees with this and says you can; (b) If a candidate asks for the salary range when being interviewed, do you have to provide that range? California says you do have to provide that information; (c) Are you in a geography that is not currently impacted, but is likely to be? Based on recent developments, Cincinnati and Philadelphia will likely be included in these bans in the not too distant future, so best to establish best practices early to be prudent.
 
Your firm leadership should be standing on the right side of this issue. Your clients and prospective employees will care. Get on the front foot to establish yourself as an employer who is actively addressing these issues.
 

(NOTE: This article is not to be taken as legal advice. The author is not a practicing attorney, nor does the author purport to be. For any legal question or issue related to these topics in your state or city, you should seek advice from a practicing attorney.)

The salary history ban

1/23/2018

 
(For updates on which States and cities are impacted as at the time of reading this article, please visit this blog for the most up-to-date information: Salary history bans in 2021.)
​

Unequal pay between men and women exists: it’s been widely reported that women earn around 80% of what men earn.

One issue contributing to this is a lagging effect. Offers that are based on what salaries are currently being paid, which for women can be around 20% less than men, perpetuates the status quo. Numerous states, cities and counties in the US are trying to address this issue by enacting new laws and regulations to address what questions employers can ask around salary and salary history. By doing this, the hope is that people are offered salaries that accurately reflect their experience and skill set in their market.

This affects professional services firms because as laws have changed, and are still scheduled to change, this will affect the hiring practices within firms, written or otherwise. These new laws prohibit hiring practices which ask a potential candidate about their salary or salary history.
​
Firms would be prudent to take a stand on this issue early. First, to get ahead of compliance, and secondly, to impress potential candidates through their proactivity to be on the right side of these discussions.

We are having many conversations with firms on this topic to help ensure both compliance and best practice going forward.
​
Current status on law’s affecting the question of ‘how much did you make last year’

Some states, cities and counties have specifically banned questions on ‘how much did you make last year’. Here is a list in order of the date the bans or prohibitions were enacted:

​2017:
  • Oregon - October 6, 2017
  • New York City - October 31, 2017
  • Delaware - December 14, 2017
  • Albany County (NY) - December 17, 2017

2018:
  • California - January 1, 2018
  • Massachusetts - July 1, 2018
  • Vermont - July 1, 2018
  • Westchester County (NY) - July 9, 2018

2019:
  • Connecticut - January 1, 2019
  • Hawaii - January 1, 2019
  • Suffolk County (NY) - June 30, 2019
  • Washington – July 28, 2019
  • Alabama – September 1, 2019
  • Maine – September 17, 2019
  • Chicago – September 29, 2019
  • Kansas City – October 31, 2019

2020
  • New Jersey – January 1, 2020
  • New York – January 6, 2020
  • Cincinnati – estimated to be March 10, 2020
  • Toledo – June 25, 2020

2021
  • Colorado – January 1, 2021

Bans or prohibitions not affecting the private sector

Other states and cities have some form of salary history ban, but as of yet they do not affect employees in the private sector:

2017:
  • City of New Orleans LA - January 25, 2017
  • City of Pittsburgh PA - January 30, 2017

2018:
  • City of Salt Lake City UT – March 1, 2018
  • City of Louisville KY - May 17, 2018
  • State of Pennsylvania - September 4, 2018

2019:
  • ​City of Atlanta GA – February 18, 2019
  • State of North Carolina – April 2, 2019
  • State of South Carolina – May 23, 2019
  • City of Jackson MS – June 13, 2019
  • Montgomery County (Maryland) – August 14, 2019

As an employer located in a banned state or city, what is prohibited
​
  • Internal policies or practices need to be updated to dispense with questions relating to salary. HR professionals, internal recruiters, and internal hiring managers need to look at what policies or practices (written or otherwise) currently exist which ask candidates about their salary and salary history. Those practices must be dispensed with as these questions during the interview process are now prohibited from being asked.
  • Screening relating to salary is prohibited. Any screening which sorts potential candidates based on their salary information is also prohibited. Programs or databases which purport to do this must be overhauled or updated to comply with these new laws.
  • Other benefits are also included in this ban. These prohibitions extend to the benefits that may have been included in a candidate’s whole compensation package.
  • These prohibitions extend to agents of employers. Recruiting or search professionals are not exempt from these new laws. These prohibitions apply to the asking of the questions, and exceptions are not made based on whom is asking those questions.
  • Employers can still stipulate salary ranges. Employers can still set salary ranges for their roles, and they will likely use market data and their recruiting knowledge to form these ranges.
  • Voluntary disclosure by a candidate does impact these new laws. Employers can take into account information which is voluntarily disclosed to them by a candidate about their salary history during the interview process when setting the salary they will offer. How this sits with the intent of the new prohibitions is intriguing, and employers might be prudent to avoid this altogether.
  • Some states can still use salary information to verify a salary post-offer. These exceptions will get complicated if firms are trying to be too literal with this. And, there are still prohibitions on using that information to get around what the bans intend. Again, employers might want to avoid getting into the territory of having to defend their position in relation to these particular provisions.
  • While it may be law, some employees can’t activate their rights for some time. Oregon’s provisions stipulate a time delay between a person being able to act on these new laws and receiving any awarded compensation. 

Debate highlights

Some employers have argued that a candidate’s current salary is an indicator of their market worth. Other employers feel ill-informed without a current salary read because they use that salary as an indicator when offering a new salary for the role they’re recruiting for. But these new laws prohibit that exact practice, as it perpetuates the gender pay gap (and other discriminatory practices). Experienced HR professionals and search professionals will already know good salary ranges for the role they are recruiting for. If employers don’t know this, that’s an area where search professionals can show their value. 

A salary is rarely an indicator of worth. Salaries are more often than not a reflection of the prior employer’s pay policies and attitudes relating to their employees. And employers can have outdated or behind-market salary ranges that they try to retroactively apply, particularly if they haven’t gone to market for some time.  And, as we’re seeing, one effect of this is that it can disadvantage some women and other groups in the workforce. 

On the candidate side, they are often reluctant to reveal their salaries. It is highly sensitive and personal information that – if they don’t have a rapport with the firm or recruiter they’re working with – they don’t yet know or trust what is to happen with that information. Whilst recruiters and HR professionals might be used to dealing with salary information on a daily basis, it shouldn’t be lost on them as to how candidates can feel about talking about salary generally. 

Going forward 

Going forward, firms need to develop better and different strategies for finding the right candidates for the right roles, and in turn paying them the right package. 

Firms can use interviewing techniques or specific-issue reference checking to test a candidate’s experience, skill set, knowledge and individual value. These methods don’t rely on salary and therefore don’t go up against these now prohibited questions on salary. High value search and recruiting partners differentiate themselves by using these techniques, and don’t rely on prior salary as a short-cut.

Firms should ask questions around salary expectation. Firms should know, either through their experienced HR professionals or their search and recruiting partners, whether those expectations are realistic. (If they’re not, that is a different conversation.) If a candidate’s salary expectation does not align with a salary range for a role at a firm, then that role the candidate and firm are discussing together is not going to be the right fit for both at that time. And that discussion is fine to have. But a firm can’t use salary history or data to formulate an offer.

A national firm would be wise to have only one policy across their firm which deals with their hiring policies to comply with the salary ban laws, as these new laws are simply the first of many. Savvy firms should draft a policy based on the strictest interpretation, and apply that across all offices to avoid a complicated state-by-state approach down the road. Taking a fair and modern approach will become a selling point for your firm. Your clients, your employees and your potential employees should know about this.

Where does your firm stand on this greater issue
​

These new laws go to the heart of a very important discussion in our society. This affects both women and men. 
Your firm leadership should establish where they stand on this issue on principle, and beyond that which is currently required by law. Your clients, your employees, and potential employees, will all appreciate you being prudent and aligning yourself on the right side of the discussion. 
​
Enjoy the discussions. We are in exciting times.

(NOTE: This article is not to be taken as legal advice. The author is not a practicing attorney, nor does the author purport to be. For any legal question or issue related to these topics in your state or city, you should seek advice from a practicing attorney.)

    Author

    Kate Harry Shipham is the Principal of KHS People LLC, an executive search firm for BD and marketing people in professional services firms. Kate has done search and recruiting for 12 years and prior to that was an attorney. She loves what she does, and is always open to continuing the discussion: kate@khspeople.com

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