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Compensation Inquiry Limitations Gain Traction
Posted: December 06, 2017
- California, effective 1/1/2018
- Delaware, effective 6 months after passage, approximately 12/14/2017
- Massachusetts, effective 7/1/2018
- Oregon, effective 91 days after legislature adjourns, approximately 10/09/2017
- Puerto Rico, effective 3/8/2017
- New York City, effective 10/31/2017
- Philadelphia, under legal challenge
- San Francisco, effective 7/1/2018
- Some laws prohibit inquiry by a third-party, such as a recruiting company or background screening company, on behalf of the employer.
- Some laws permit inquiry after an offer of employment, which includes compensation, has been made. Some laws, however, prohibit inquiry at all stages of hiring.
- Some laws allow an employer to consider compensation, but only if it’s voluntarily disclosed by the candidate without any prompting.
- Some laws have an exception for positions where compensation verification is required by federal, state, or local law or where compensation is established through collective bargaining.
- Some laws specifically include benefits (such as car allowances, bonuses, and commissions) as part of compensation, while others are silent on this point.
- Some laws specifically allow an employer to ask a candidate about his or her expectations in regard to salary, benefits, and other compensation. Additionally, one law requires an employer to inform the candidate about the position’s anticipated salary range, if requested.
- Some laws set forth possible employer penalties for violation. New York City, for example, allows for up to $125,000 for unintentional violation of the law and up to $250,000 for willful violation.
- Where applicable, remove questions about compensation history from employment applications and other candidate data collection tools.
- Educate team members on changes in law and new processes regarding compensation inquiry.
- Consider the feasibility of a single, nationwide policy to minimize confusion and continuing process changes.
- Keep in mind that compliance with the Federal FCRA, State FCRA Analogues, and other applicable law is still required.