Assembly urged to bar asking salary history in hiring

Progressive Maryland submitted this testimony to the House Economic Matters Committee March 12 on behalf of bills prohibiting the use of salary history in determining compensation in the hiring process – a practice that disadvantages all working people seeking employment but particularly impacts women and minorities.


 

Progressive Maryland submitted this testimony to the House Economic Matters Committee March 12 on behalf of bills prohibiting the use of salary history in determining compensation in the hiring process – a practice that disadvantages all working people seeking employment but particularly impacts women and minorities.

As organizations dedicated to ensuring that working people in Maryland and throughout the country are treated fairly in the workplace, we write to strongly urge you to support SB 377/HB 512. Maryland made important strides in strengthening its equal pay laws by passing the Equal Pay for Equal Work Act in 2016, but too many employers are still setting pay in a way that perpetuates gender and racial pay disparities without justification. SB 377/HB 512 targets one of these insidious employer practices by prohibiting employers from setting pay based on job applicants’ salary history and by requiring employers to provide a pay scale for a position upon request, thereby leveling the negotiating playing field.

Using salary history in the hiring and pay setting process is an unfair practice that hurts all working people in Maryland, but has a disproportionately negative impact on women and people of color who face conscious and unconscious discrimination in the workplace and, consequently, are paid lower wages, on average, than white men. It also penalizes individuals—predominantly women—who had to reduce their hours or leave their prior job to care for children or family members, or who worked for the nonprofit sector, and whose prior salary, consequently, doesn’t reflect their current qualifications or market conditions. Relying on salary history perpetuates and reinforces gender and racial wage gaps throughout women’s careers, hurting women, their families, and the state’s economy.

By passing SB377/HB 512, Maryland would join a growing chorus of states and cities seeking to stop employers’ unfair and maryland_state_house.jpgunnecessary reliance on job applicants’ salary history.

Massachusetts, California, Delaware, Oregon, Puerto Rico, New York City, San Francisco, and Philadelphia have all passed legislation prohibiting employers from relying on salary history—many times with bipartisan and business support. Likewise, the District of Columbia, New York, New Jersey, and the cities of New Orleans, Pittsburgh, and Salt Lake City have also prohibited the use of salary history by state or city agencies. And this year, nearly 20 states—from Nebraska to Vermont—are considering enacting similar legislation. We are seeing a groundswell of support for this legislation throughout the country because it is a commonsense, simple, yet impactful measure for closing gender and racial wage gaps.

Many businesses recognize that using salary history in the hiring process is neither a necessary nor a good business practice. Small and large businesses throughout the country, including Bank of America, Wells Fargo, Cisco, Progressive, and Amazon, have announced that they are no longer asking applicants to provide their salary history, acknowledging that this practice perpetuates wage gaps, and that employees should be paid based on their experience, skills, track record, and the responsibilities they will be assuming, not on what they happened to be paid in their past job.

 The Greater Boston Chamber of Commerce publicly supported similar legislation when it passed in Massachusetts in 2016. Ending reliance on salary history—a practice that unjustifiably perpetuates gender and racial wage gaps within a workplace—will help employers decrease their exposure to costly pay discrimination litigation.

SB 377/HB 512 will also help Maryland businesses attract and retain diverse and qualified talent. As a human resources professional stated in Forbes, the practice of asking for salary history is “intrusive and heavy-handed . . . It's a Worst Practice . . . It hurts an employer’s brand and drives the best candidates away.”

Moreover, a recent study showed that when salary history information was taken out of the equation, the employers studied ended up widening the pool of workers under consideration and interviewing and ultimately hiring individuals who had made less money in the past.

 SB 377/HB 512 still permits a job applicant to volunteer her salary history information and permits an employer to rely on that information to offer the applicant a higher salary. And nothing in this bill prevents an employer from asking applicants for their salary requirements or expectations. Since research shows, however, that women ask for less than men in pay negotiations, even when they are equally qualified and applying for similar jobs, this bill requires employers to provide applicants the salary range for the position, upon request. Research shows that when job applicants are clearly informed about the context of negotiations, gender wage gaps narrow.

 Stopping employers from relying on salary history and requiring employers to provide applicants with pay scales upon request are crucial steps to closing the wage gap. We urge the members of this Committee to once again stand up for working people in Maryland by supporting SB 377/HB 512.


Progressive Maryland joined thirty-six other social justice, civil and political rights, and labor organizations in supporting these bills.