“How much did you make at your last job?” is officially off the table starting this Sunday, September 29th, when Illinois joins more than a dozen states that have enacted salary bans.
House Bill 834 amends the state’s Equal Pay Act of 2003 to prohibit employers from screening candidates based on their current or prior salary. Penalties for employers who violate the law include up to $10,000 in special damages and civil penalties of up to $5,000 for each violation.
The salary ban was designed in an effort to tackle the gender and race compensation gap, and many new hires are experiencing significant salary increases in locations where employers can no longer base job offers on previous salary. Fair compensation benefits employers, too: Employees paid fairly are more likely to have a higher level of satisfaction at work and stay longer, one study shows.
Each state has slightly different guidelines, however, so it’s important to know the specifics of the ban in your location. At Talentfoot, we serve clients all over the country, including places where the salary ban is effect, such as New York and California.
If you’re an HR, recruiting professional or hiring manager, this is no joke. You need to get up to speed quickly to avoid exposing yourself and your organization in dangerous legal waters.
Our executive recruitment team (call us Salary Ban HQ), is already answering dozens of questions on the topic from organizations preparing to put new protocols in place. Let us know if we can help you, too.
In the meantime, here are some Do’s and Don’ts about how to bring your hiring practices into compliance:
- Do review all hiring practices and procedures to ensure they meet salary ban requirements, from printed to online materials. Remove salary information questions and requests from job applications, interviews, employee handbooks, and agreements.
- Do provide training to HR employees and others responsible for interviewing and hiring. Make sure they understand what is (and is) not legal and appropriate to ask applicants.
- Do request that former employers remove salary information from W-2s once you’ve extended an offer and have a candidate’s permission to verify previous employment.
- Do take measures to remedy unfair or unlawful pay scales and structures. Establish a system to document how wages and salaries are determined for new employees, conducting a wage audit, if needed.
- Do set a salary range for each position. Provide specific and accurate information about compensation, bonuses, and what the role entails.
- Do tread carefully when asking applicants their expectations regarding compensation, and seek legal counsel if you are unsure whether you should ask—and if so, how.
- Do seek salary history “clues” in an applicant’s resume so you can offer an appropriate range. Also be sure to involve an experienced recruiter who understands the job market and can help your team set a value for the role.
- Don’t ask about any form of previous compensation — including salary, bonus, and equity — during the entire hiring and negotiation process.
- Don’t suggest that an applicant’s past or current salary is important to the decision about whether to hire him/her.
- Don’t solicit salary history information from an applicant’s current or former employers, unless the information is public record or the applicant is a current employee of yours.
- Don’t consider salary history information in compensation or hiring decisions even if an applicant provides it voluntarily, without prompting. Tell them that you aren’t seeking that information, and do not include that number in your interview notes.
- Don’t forbid employees from discussing wages and benefits with others.
- Don’t put your company at risk of a pay equity claim. While you’re at it, make sure your policies and procedures are fully in line with both the Equal Pay Act and Title VII.
Whether you’re a job seeker or hiring authority, what are your salary ban questions?
