What You Should Know About Pay Equity Laws in the United States

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Huge strides in the push for gender equality were made again on Thursday, October 12, 2017, when a pay equity measure was signed into law in California. This bill will take effect on January 1, 2018.

California is the eighth jurisdiction to pass this type of law, right after Massachusetts, Oregon, Puerto Rico, and Delaware. Cities, like San Francisco, and New York City, have also legislated similar measures to shield candidates from salary inquiry, with a law passed in Philadelphia currently pending the outcome of a legal challenge concerning its constitutionality.

The intent behind this new breed of legislation stems from wage inequality. According to the U.S. Census, the median annual pay for a woman who holds a full-time job year-round is $40,742, while the median annual pay for a man who holds a full-time, year-round job is $51,212.

The logic is that if an employer bases a candidate’s salary on their past compensation, women – who have historically been paid less than men merely based on their gender – may continue to lag behind for the entire length of their careers, not only in salary but in merit increases as well.

But this law doesn’t just affect women. Many supporters think that employers should set a salary that is reflective to the job position, and not the person.

Another outcome of the new California salary privacy bill is that employers must provide a pay range for the position to the candidate upon request.

Although these laws prohibit employers from inquiring into a candidate’s past salary history unless certain circumstances have been met, candidates can voluntarily disclose their past compensation. In the case of some pay equity legislation employers are prohibited from reporting former salaries.

Several pay equity bills are under consideration in states such as Illinois and New Jersey, and municipalities like Westchester County, NY. These types of efforts to facilitate pay equity at state and local levels is increasing as time goes on.

For more information regarding pay equity and its impacts to employers, download the HireRight Equal Pay Legislation eBook!

NEW eBOOK: Equal Pay Legislation 2017
Your Guide to Equal Pay Legislation

Why the legislation is being passed? How it may benefit women in the workforce? What are the penalties for not complying with the legislation?

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Dawn Hirsch

Dawn Hirsch is the chief human resources officer at HireRight and is responsible for attracting, developing, and advancing talent across the company. Dawn brings more than 20 years of experience leading human resources teams in organizational effectiveness, acquisition and integration strategies, culture change and transformation, and talent acquisition for large, global companies.

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