As an employer, you want to know everything you can about potential employees. But some questions, like inquiring about salary history, are off-limits—in some states. To stay compliant, learn salary history laws by state.

What is salary history?

Salary history questions ask candidates how much they earned at each of their past jobs, along with their current position earnings. Employers might ask potential employees about their salary history on a job application or during the interview process.

Here is a salary history example some employers may ask:

• What is your current salary?

Salary history typically asks employees to list the following information:

• Company names
• Positions held
• Salary and bonus pay

Some employers use salary history information to avoid making an offer that’s less than what the candidate currently earns or has earned in the past.

But, asking salary history questions can also limit a worker’s earning potential. And, many argue that asking for a salary history can contribute to gender inequality.

Salary history laws by state

As of right now, there is no federal salary history ban in place.

However, some states have salary history laws. The main objective of these laws is to promote race and gender equality in the workplace.

Salary history laws by state may:

• Regulate salary history questions (e.g., cannot ask until after job offer negotiations)
• Outright ban asking salary history questions

Does your state have salary history laws in place?

Currently, the following states have laws that affect all employers:

• California
• Connecticut
• Delaware
• Hawaii
• Illinois
• Massachusetts
• New Jersey
• New York
• Oregon
• Vermont

These states have laws that only affect state agency employers:

• Michigan
• North Carolina
• Pennsylvania

Some cities also have salary history laws that prevent all employers from asking salary history questions. These cities include Atlanta, Georgia; Louisville, Kentucky; Philadelphia, Pennsylvania; and New York, New York.

Keep in mind that salary history laws are not going away anytime soon.

If your state does not currently have salary history laws, you may want to keep an eye out for them in the future. For example, Colorado recently signed a law banning salary history questions starting in 2021.

Contact your state for more information on salary history restrictions and bans.

Goodbye salary history, hello salary expectation

Many businesses use salary history information to offer a fair and reasonable compensation package. If you depend on salary history data when creating your employment offer, what can you do?

Instead of asking candidates about salary history, you can ask them for their salary expectations.

On asking candidates salary expectation questions, Lauren Hasson, Founder of DevelopHer, said, 

This is important in that it shifts the salary conversation to focusing on the value the candidate will bring to the company and levels the playing ground for all candidates.”

Salary expectation questions ask candidates what they hope to make at your business. You can ask for a candidate’s salary expectations to avoid making an offer that’s too low.

Some businesses that aren’t subject to state salary history laws have already moved towards salary expectation questions.

If you decide to ask employees about their salary expectations, you can provide salary expectation ranges or let candidates write in their answer.

A salary expectation question might look like one of the following:

• What are your salary expectations for this position? $___________
• What are your salary expectations for this position?
  • $35,000 – $40,000
  • $40,000 – $45,000
  • $45,000 – $50,000
  • $50,000+

As salary history laws by state become more prevalent, you may consider changing up your hiring process. Asking candidates for salary expectations might be a good alternative to help you create your compensation package.

Other salary history alternatives

Asking candidates for their salary expectations shouldn’t be your only method of coming up with a compensation package.

Whether you decide to ask salary expectation questions or not, you should also do some research to come up with a fair compensation package.

When doing research, look at:

• What other businesses pay employees in similar positions
• The average salary for the position in your area
• What you pay current employees
• The candidate’s skills, experience, and education

Some tools you can use to help you decide on a fair salary include:

• Bureau of Labor Statistics
• Glassdoor, Payscale, etc.
• Other businesses’ job descriptions

Doing salary research is essential, regardless of whether a candidate discloses their salary history or expectations. Be competitive and fair when deciding how to set salaries.

Once you hire an employee, you can’t forget to add them to your payroll! Patriot’s payroll software lets you run payroll in three easy steps. Get started with your self-guided demo today!

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This is not intended as legal advice; for more information, please click here.