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Salary (Non)Disclosure Rules Continue to Spread

November 1, 2017


As we reported recently, the White House announced an immediate stay of new EEO-1 pay data collection requirements that would have required more transparency about compensation based on race and gender.  Citing the unnecessary burden and other data interpretation concerns, the Office of Management and Budget called for further review of the proposed Equal Employment Opportunity Commission action. While this reporting and disclosure rule was widely (and inaccurately) panned as halting the “Equal Pay Rule,” a growing number of states and local jurisdictions are passing and/or pushing for greater salary transparency while also prohibiting salary-related questions.

Some cities (e.g., Albuquerque, N.M., and Oakland, Calif.) have passed ordinances that require gender pay equity reporting by contractors who bid on city business.  The Office of Federal Contract Compliance now requires covered employers to post and comply with the Pay Transparency Nondiscrimination Provision.  Other states have also addressed equal pay for equal work concerns through statutory means calling for greater transparency of wages by position.   

More recently, a new California law represents a growing movement toward prohibiting employers from inquiring about the salary histories of job applicants.  Following the lead of other states and municipalities, the California legislature determined employers should not perpetuate previous salary discrimination by asking questions about salary history and acting on that information.  Thus, employers (or their agents) in California can neither seek salary history information (including compensation and benefits) from job applicants nor rely on that information as a factor in determining what salary to offer.

While there have been bills proposed in North and South Carolina and at the federal level regarding pay transparency and banning questions about salary history, there does not appear to be much momentum to get these initiatives passed this legislative year. 

However, there is no question that a trend is emerging to address pay equity through certain disclosure and nondisclosure measures.  If you employ persons in other states, you may want to take the preemptive steps of deleting salary questions from applications and training hiring managers accordingly.  And, of course, even with the halting of the additional pay data requirements, the EEOC clarified that gender pay inequality was still a “high priority” for enforcement.  Employers are thus well-advised to be certain they self-audit or otherwise ensure they are complying with the mandate that equal pay should be provided for equal work. 

Our Insights are published as a service to clients and friends. They are intended to be informational and do not constitute legal advice regarding any specific situation.