Beginning October 1, Maryland employers can no longer make salary decisions about job applicants based on past wage history, per a new salary ban.
Keep reading to learn about how this law affects job applicants in Maryland.
The New Law
Under this new law, several restrictions apply regarding asking about past salary during the hiring process or background checking on an applicant's past wage history. Employers may not seek this information either directly or indirectly.
However, once an employment offer has been extended, employers may rely on wage history only if it is provided by an applicant to support a higher one.
SCOTUS Declines to Review the Issue
In July, the United States Supreme Court declined to review lower courts' split decision over the issue of how prior salary is a "factor other than sex" in gender and salary equity under the Equal Pay Act. Under this act, employers must give equal pay regardless of sex.
Jurisdictions Ban Salary Records Inquiries
Throughout the country, several states and regions have taken to prohibiting asking job candidates about their pay history. However, these prohibitions vary in how they are enacted, their scope, and their applicability. Also, some states and regions merely ban pay history from public employers.
Using Pay History to Stay Competitive
There are legitimate purposes that some employers may use a candidates' pay history, according to the Society for Human Resource Management (SHRM). They might use past salaries as a means to make attractive offers to potential employees. Also, knowing pay history from another company might help some businesses remain competitive in the hiring market.
Pay Transparency Fostering Gender Equity
According to research, the pay gap between women and men is the most lessened when companies employ transparent pay practices. A recent study examined a comparison of salary earnings for both men and women with the same education, in the same location, doing the same job. Data found that women earn 98 cents to every dollar that men make. However, researchers found that when companies are transparent about their payment processes, it is estimated that women earn between $1 to $1.01 for every dollar that a man makes. This transparency then effectively erases the gender pay gap.
HR Best Practices
At Infinity Consulting Solutions (ICS), we realize that it is essential to be a part of a broader professional community to learn the best industry practices and stay ahead of new information to serve our clients better. Through membership with the SHRM, ICS can leverage the many years of knowledge that SHRM members hold and translate that into successful daily business operations. Contact us today to learn more about our consulting services.