Delaware Becomes the 'First State' to Enforce Ban on Employer Requests for Salary History
On June 14, 2017, Governor John Carney signed a new law that will prevent Delaware employers from requesting the salary history of job applicants. It is designed to narrow the pay gap between men and women. The law currently will be the first state law of its kind to go into effect on December 14, 2017. Although Massachusetts passed a similar law, it does not go into effect until January 2018. Employers cannot be sued under Oregon’s law until January 1, 2019. New York City, Philadelphia, and Puerto Rico have also passed similar laws.
The new law amends Chapter 7, Article 19 of the Delaware Code by making it an unlawful employment practice for an employer or the employer's agent to (1) screen applicants based on their compensation histories, including by requiring that an applicant’s prior compensation satisfy minimum or maximum criteria; or (2) seek the compensation history of an applicant from the applicant or a current or former employer. If an employer can demonstrate that the employer’s agent, who is not an employee, was informed of the requirements of the law and instructed to comply by the employer, then the employer is not liable for actions taken by the agent in violation of the law.
Notably, the law does not prohibit an employer or an employer’s agent and an applicant from discussing and negotiating compensation expectations provided that the employer or employer’s agent does not request or require the applicant’s compensation history. Moreover, the law does not prohibit an employer or employer’s agent from seeking compensation history after an offer of employment with terms of compensation has been extended to the applicant and accepted, for the sole purpose of confirming the applicant’s compensation history. “Compensation” includes monetary wages, as well as benefits and other forms of compensation.
The Delaware Department of Labor will enforce the law. Any employer who violates the law will be subject to a civil penalty of not less than $1,000, nor more than $5,000 for the first offense, and not less than $5,000, nor more than $10,000 for each subsequent violation.
Arent Fox’s Labor & Employment group will continue to monitor developments in this area. If you have any questions, please contact Michael Stevens or the Arent Fox professional who regularly handles your matters.