The Equal Pay Act (EPA) prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort and responsibility under similar working conditions. Women have historically been paid less than men for the same work, and this still holds true despite the EPA. According to the Census Bureau, the gender wage gap in 2017 for full-time, year-round workers was 19.5%. In other words, on average, women made 80.5 cents on the dollar as compared to their male counterparts. The gender wage gap is even greater for black and Hispanic females.
There are numerous factors that contribute to the gender wage gap, but the one that seems to be drawing the most attention these days relates to asking job applicants about their pay history. What once was considered an innocuous question on an employment application or in a job interview, is now viewed as a contributing factor to the gender wage gap. To address this, cities and states across the U.S. are now banning employers from asking applicants about their current or past salary. They are taking pay history out of the gender wage gap equation.
This makes sense. Let’s face it, when a woman is paid less than her male counterpart at the outset, and her future wages hinge on her previous salary, the inequity is self-perpetuating. The truth is, the amount that an applicant was making at her last job is irrelevant. The salary for a given position should be based on the applicant’s qualifications, experience, education, and other relevant criteria. And as a practical matter, employers have more to lose than to gain by asking about pay history, particularly if they use that info to justify a wage discrepancy between male and female employees. This issue has been addressed in the courts with mixed results.
On February 25, 2019, the Supreme Court vacated a 9th Circuit Court of Appeals‘ ruling that a person’s previous compensation may not be used to justify gender pay disparity. The 9th Circuit’s ruling was in contradiction of a 7th Circuit decision from 2005 that allowed prior salary to be used to justify pay disparity. Significantly, the Supreme Court’s ruling was not based on the merits of the case, but on the fact that one of the judges who voted in favor of the ruling died before the 9th Circuit’s final decision was issued. The Supreme Court did not rule on the issue of whether a man and woman can be paid differently for the same work based on previous pay, but sent the case back to the 9th Circuit.
I’ve worked on behalf of employers for more than three decades and rarely do I support legislation that restricts employer rights or burdens our business owners with unfunded mandates or compliance directives. However, banning inquiries into pay history doesn’t cost employers a dime and it is not burdensome to business owners. Will banning inquiries into pay history eliminate the gender wage gap? No. But it will eliminate one contributing factor to wage disparity, and that’s a step in the right direction.
It is not (yet) unlawful in Texas to ask applicants about their pay history, but I encourage employers to eliminate that question from their hiring process. Not because they are required to do so, but because it’s the right thing to do. Equal pay for equal work. It’s a simple concept. And it’s the law.