It has become a recent trend among the states to pass laws prohibiting employers from inquiring about a job applicant’s past wages, compensation, or salary. Indeed, these new state laws are instructing employers not to rely in any way upon an applicant’s past salary when determining the applicant’s compensation. Hawaii has now joined this movement.
In passing this law, Hawaii’s legislature expressed concern about the pay disparity that persists between Hawaiian men and women performing similar work. As of 2015, the gender wage gap in Hawaii stood at $.16 on the dollar. On average, a woman earned $.84 to every dollar a man earned. The gap increased when considering women of color. Native Hawaiians, both men and women, also labor under a pay gap, since the research was indicating that both genders earned less than non-native Hawaiians. It was the judgment of the Hawaiian legislature that this pay gap was due – in part – to the fact that employers will often require applicants to disclose their salary history, and when a female applicant discloses a lower wage than what the employer may have been prepared to pay, the employer will proceed to pay that lower wage. In a related vein, the Hawaiian legislature objected to the common practice among employers of discouraging, or even prohibiting, employees from discussing their wages among themselves. This “pay secrecy” practice – in the opinion of the legislature – undermined efforts to close the pay gap.
In light of this, Hawaii enacted an amendment to its equal pay statute that does two things:
- It prohibits employers from inquiring about or relying on the salary history of a job applicant
- It prohibits workplace pay secrecy policies
The prohibition on salary history inquiry is broad; not only can the employer not ask the applicant about her past wages, but it should not ask her previous employer about her salary history, and it should not conduct a search of publicly available records for the purpose of obtaining her salary history. There is an exception to this: if an applicant “voluntarily and without prompting” discloses her pay history, then the employer may consider it and may even take steps to verify the past salary. Employers should tread carefully here: they do not want to get into a dispute with an applicant over whether the information was disclosed “voluntarily” and “without prompting.” An employer could wind up in a “he said, she said” scenario, where the job applicant claims the recruiter somehow encouraged the applicant to make the disclosure.
In a first among salary history inquiry bans, the Hawaiian law expressly provides a safe harbor for employers who indirectly discover salary history while running a background check. If the check was being done to verify disclosure of information not related to the applicant’s salary, but the wage information is indirectly discovered, the Hawaiian law is not violated; however, the employer still cannot rely upon it during the hiring process.
This law takes effect on January 1, 2019.
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