New laws popping up around the country highlight employers’ responsibilities
As wage and hour attorneys serving employees in Ohio and throughout the Midwest, we closely monitor the development of new laws that affect employees’ rights. One trend that we’re watching is the rise of salary transparency laws and bans on asking about salary history in various jurisdictions.
Colorado started this trend in 2019 by passing a law that required employers to disclose a salary or salary range in job postings, as well as a general description of benefits and other compensation. Since then, many other state and local governments have passed laws that require employers to disclose the salary range and/or prohibit employers from asking about salary history during hiring. Two of those jurisdictions are here in Ohio: in both Cincinnati and Toledo, local ordinances prohibit employers with 15 or more employees within the city from asking about salary history or considering information on previous salaries in hiring and compensation decisions.
Although these laws do not yet directly apply to most employees in Ohio, there are still implications for employers that hire people in multiple jurisdictions, not to mention fully remote positions that can be done from anywhere. These laws also shine a light on a broader point: the responsibility employers have to ensure that their pay structure does not run afoul of anti-discrimination laws.
Hiding salary information can contribute to pay inequality
When a prospective employer doesn’t disclose up front what they are willing to pay for a particular role, they’ll often start the hiring process by asking the job seeker what their salary requirements are or (in jurisdictions where this is still legal) what their current salary is. The prospective employee is left to attempt to negotiate salary without a reference point to determine what’s fair, especially if they are new to the workforce or to the industry.
Job seekers can make up some of this gap in knowledge by researching salaries for similar positions online, but those sources are not always reliable, as they aggregate information on roles that may not be especially similar despite sharing the same title. It’s not especially reasonable for an employer, which has far more information about what the role entails and what the market rate for the position should be, to put the onus on the prospective employee to come up with a salary figure.
More significantly, from a legal perspective, when employers hide the proverbial ball on salary, they can end up in violation of anti-discrimination laws. For instance, companies that assign salaries based on negotiation or previous salary could end up systematically paying men more than women, which violates the Equal Pay Act. It’s not acceptable for that company to say, “the men negotiated for more.” It’s the employer’s responsibility to audit their salary structure and make sure it complies with the law.
Victims of pay inequality may have legal recourse
While the law gives employers a fair amount of discretion when it comes to salaries and benefits, employers cannot discriminate on the basis of sex, race, age (if over 40), national origin, or any other protected characteristic. Current law in most jurisdictions may not require pay transparency, but it absolutely does require employers to ensure that their salary structure does not discriminate. If you believe you are being paid less based on your gender, race, religion, or other protected characteristic, you may have a case. We can help.
The first step is to talk to an experienced legal professional about your rights and options. Give us a call or contact us online to schedule your free case evaluation with Nilges Draher LLC.