United States: Connecticut Employers Are Banned From Asking Applicants' Salary History Effective January 1, 2019

Executive Summary: As of January 1, 2019, Connecticut employers are prohibited from inquiring about an applicant’s prior salary history. The new law, Public Act No. 18-8, An Act Concerning Pay Equity (the “Act”), is aimed at closing the gender wage gap. Statistics still show that women earn 79 cents for every dollar earned by men to perform the same work. Many speculate that the gap persists, in part, because employers often base salary for new hires on their salary at their previous job. As a result, the continuation of lower pay rates for women persists, and the wage gap continues unabated. This law and similar laws prohibiting asking about prior salary are an effort to close the gap between what men and women earn.

The Act amends Conn. Gen. Stat. § 31-40z. Section 31-40z originally became effective on July 1, 2015, and prohibited all private and public sector employers with at least one employee from penalizing employees who disclose their wages, discuss their wages with other employees and/or who ask about another employee’s wages. It also permitted employees to sue their employers for violation of the statute and required that any such lawsuit be brought within two years of the violation.

Under the amended law now in effect, the following has been added:

  • An employer is prohibited from asking a prospective employee about prior salary and wage history;
  • An employer is also prohibited from directing a third party to inquire about an applicant’s wage and salary history;
  • The prohibitions apply regardless of an applicant’s gender;
  • An employer may discuss salary history with an applicant if the applicant voluntarily discloses the information;
  • The prohibitions against inquiring about salary history do not apply if a state or federal law specifically authorizes or requires verification of salary history for employment purposes;
  • An employer is not prohibited from inquiring about other elements of an applicant’s compensation structure so long as the employer does not seek information about the value of each compensation component; and
  • The right to bring a lawsuit for violation of the statute has been extended to prospective employees.

Connecticut is not the first jurisdiction to ban inquiries into pay history. Massachusetts, Delaware, California and Oregon have also prohibited employers from inquiring into an applicant’s salary history, as have Puerto Rico, New York City, Albany, San Francisco and Philadelphia. Pittsburgh and New Orleans have passed similar laws applicable only to the public sector.

But these laws have sparked some controversy. For example, in April 2018, in Chamber of Commerce for Greater Philadelphia v. City of Philadelphia, the Eastern District of Pennsylvania held that the Philadelphia pay history ban was an unconstitutional violation of the First Amendment and struck down that portion of the law. The court left intact the portion of the law prohibiting an employer from basing a woman’s salary on prior salary history if doing so would result in her being paid less than a man doing the same work. The case has been appealed to the U.S. Court of Appeals for the Third Circuit. The latter portion of that ruling appears to be consistent, however, with the Equal Pay Act of 1968 as evidenced by Rizo v. Yovino. In that decision, also from April 2018, the U.S. Circuit Court of Appeals for the Ninth Circuit, sitting en banc, held that calculation of a woman’s salary based on her prior pay history is a form of gender discrimination where it leads to a woman being paid less than a man for the same work. The employer has sought certiorari to the United States Supreme Court.

Several other states and local governments are considering similar laws. The movement is gaining momentum, although the argument that laws banning pay history inquiries violate the First Amendment has also gained steam.

Employers’ Bottom Line: Employers in Connecticut should immediately communicate to anyone with interviewing and/or hiring responsibilities that they should refrain from seeking any information from an applicant about his or her wage history. It is also advisable to review job applications and other documents related to the hiring process and remove any questions that directly seek information about wage history. Additionally, employers should advise any third party vendors used to aid in the hiring process to refrain from asking any questions or gathering information related to an applicant’s wage history. Finally, all employers, irrespective of whether operating in a state or city with a prohibition against inquiring about salary history information, should review their policies to ensure they clearly state the company’s position on the issue of pay equity, including a statement that the company does not discriminate on the basis of any protected category, including gender, with regard to salary or any other terms or conditions of employment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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