Courts disagree over basing pay on salary history

While many Texas residents will have been asked about their salary histories on job applications, few may know that the courts have been unable to agree on whether or not companies can rely on this information alone to set pay. The 10th and 11th Circuits have ruled that employers should weigh other considerations when making these decisions, but the U.S. Court of Appeals for the 9th Circuit has bucked this trend. The court ruled on April 27 that a California county did nothing wrong when it decided to pay a math consultant less than her male colleagues simply because she had earned less than them in the past.

Fresno County says that its policy of basing salaries on previous earnings saves taxpayers money and reduces turnover by ensuring that only workers who are taking a step up in salary accept jobs, but labor advocates say such policies violate the Equal Pay Act and make embedded gender-based wage gaps virtually impossible to overcome. The judges were swayed by Fresno County's arguments, and they ruled that basing pay on salary history is permissible if it is done evenly and reasonably. Legal experts say that the Supreme Court may ultimately be called upon to settle the issue.

Lawmakers in Texas are aware of the issue, and House Bill 290, which was introduced in November 2016, would prohibit employers in the Lone Star State from asking about previous salaries on job applications or at any time during the recruitment process. The bill would also echo provisions of the Equal Pay Act by requiring employers in Texas to pay their female workers as much as men who perform the same or substantially similar work.

Violations of federal and state wage and hour laws are often signs of widespread and systemic workplace discrimination. Attorneys with employment law experience may be aware of this, and they could encourage companies to address these issues quickly and decisively to stave off a flood of complaints and lawsuits.

Source: The Society for Human Resource Management, "Texas Introduces Bill Banning Inquiries About Prior Salaries", Lara C. de Leon and Raven Applebaum, Jan. 17, 2017

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