State and Local Laws

2018 Year-End Recap of State and Local Laws on Background Screening

2018 was a big year with the hottest legislative trends for private employers: laws limiting background checks in the form of “ban-the-box” measures, credit check restrictions and prohibitions on inquiries into salary history.

With many new laws requiring compliance over the last year – and two that took effect January 1, 2019 – we compiled this update for your reference.

Prohibitions on salary history inquiries

Employers face the biggest changes in the area of state laws banning inquiries into an applicant’s salary history. An outgrowth of the equal pay movement – based on the theory that reliance upon prior salary to set a wage for a new job perpetuates the wage gap – many states and local jurisdictions enacted laws in 2018 (and some in 2017) to prohibit private employers from asking candidates about their salary history.

Several laws took effect within the last few months, and Connecticut’s and Hawaii’s bans started January 1, 2019.

California – Effective January 1, 2018, employers are banned from asking about an applicant’s pay history or using such information, even if the applicant volunteers it or the employer already has it.

Within the state, San Francisco has its own law, effective July 1, 2018, which prohibits employers from asking about or considering a candidate’s current or prior compensation.
Connecticut – Beginning January 1, 2019, employers are prohibited from asking about an applicant’s pay history unless the individual voluntarily discloses the information.
Delaware – One of the first states to prohibit salary inquiries, the law, which went into effect December 14, 2017, provides that employers may not ask candidates about salary history or screen applicants based on past compensation. Once an offer is extended, the employer may confirm the information.
Hawaii – Another newcomer to the legislation, the ban on asking about salary history went into effect January 1, 2019, and includes a prohibition on considering the information when determining salary, benefits or other compensation during the hiring process.
Massachusetts – Part of a package of employment-related laws enacted by the Commonwealth, employers are prohibited from asking applicants for salary history information effective July 1, 2018. Once an offer has been extended, employers are permitted to confirm prior pay.
New York City – In addition to banning prior salary inquiries effective October 31, 2017, the City’s ordinance prohibits employers from using such information if they already have it.

Two counties in New York state also enacted their own laws: in Albany County, effective December 17, 2017, employers may only request information about past compensation and benefits after a job offer has been made, while in Westchester County, effective July 9, 2018, information about prior wages may not be requested and may only be confirmed under limited circumstances.
Oregon – Another early adopter of the ban on salary inquiries, effective October 9, 2017, the state’s statute requires that an offer of employment be extended before employers may ask about pay history.
Philadelphia – The City of Brotherly Love enacted a ban on salary inquiries in January 2017, only to have the measure challenged in court as a violation of the First Amendment. In May 2018, a federal court judge granted a preliminary injunction halting the ordinance in light of the pending litigation. The battle over the law is currently pending before the U.S. Court of Appeals for the Third Circuit.
Puerto Rico – The Commonwealth outlawed inquiries into salary history as of March 8, 2017, although the measure contains exceptions for confirmation after a job offer has been made as well as voluntary disclosures.
Vermont – The state’s legislature prohibits employers from requesting pay history from candidates, effective July 1, 2018. If the candidate volunteers the information, an employer may only confirm after an offer of employment has been made.

Ban-the-box laws remain popular

While prohibitions on inquiries into salary history spread like wildfire in 2018, “ban-the-box” measures – which generally prohibit employers from inquiring about a candidate’s criminal history (including performing background checks) until later in the hiring process – remain popular with state legislatures.

Some version of a ban-the-box, also known as “fair chance” laws, have been adopted by a total of 31 states, the District of Columbia and more than 150 local jurisdictions across the country.

Specific to private employers, 11 states have such laws in place: CaliforniaConnecticutHawaii, Illinois, Massachusetts, Minnesota, New JerseyOregon,Rhode Island,Vermont and Washington.

A total of 17 local jurisdictions have also joined the movement with their fair chance laws for private employers: Austin, BaltimoreBuffalo, Chicago, Columbia (Missouri), District of Columbia, Kansas City (Missouri)Los Angeles, Montgomery County (Maryland)New York CityPhiladelphia, Portland (Oregon), Prince George’s County (Maryland)Rochester (New York),San Francisco, Seattle, and Spokane, (Washington).

Credit check restrictions still relevant

Less popular with state legislatures than ban-the-box laws and prohibitions on salary history inquiries, credit check restrictions remain an important consideration for employers.

Ten states – California, Colorado, Connecticut, Hawai’i,  Illinois, Maryland, NevadaOregonVermont, and Washington – as well as Chicago, the District of ColumbiaNew York City, and Philadelphia, all place restrictions on employers’ use of credit reports with exceptions for such checks when required by law or the responsibilities of the position.

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