Texas-based employers who engage in interstate commerce are obligated to comply with statutes in the federal Equal Pay Act of 1963 (EPA). The Equal Pay Act requires equal pay for equal work regardless of sex and applies to private and public sectors. There should be no wage discrimination between men and women as long as the conditions and job requirements and skills are equal. In an important effort to narrow the gender wage gap, there are four U.S. states that have recently passed laws that impose even stricter equal pay obligations on employers. The level of restrictions varies from jurisdiction to jurisdiction. However, all statutes prohibit screening job applicants based on their past and/or current pay information.
In August of 2016, Massachusetts was the first to enact the past pay privacy law banning questions about job applicants’ pay histories. The law prohibits employers from asking prospective hires about their salary histories until after they make a job offer that includes compensation. Many employers require applicants to give them a salary history during the initial stages of the hiring process and this is usually to determine how much they should be paid and whether they can afford their salary. The idea behind wage history laws is that pay inequality can follow people. If workers experience pay discrimination in the course of their careers, disclosing past salary details will put them at a disadvantage when negotiating compensation packages. It can reduce a person’s earning power in the long-run. The intent of this type of legislation is to address the gender pay gap by ensuring that low pay doesn’t follow women from job to job and compound over time, as well as to promote pay transparency in the workplace.
California, Delaware, New York City and San Francisco are scheduled to take effect between now and mid next year. Based on this new trend, the popularity of such laws is highly unlikely to decrease in the future.