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Federal appeals court says employers cannot ask about pay history

The gender pay gap has been in the news recently, thanks in part due to a court ruling that said employers cannot ask prospective employees about their pay history.

In April, the U.S. Court of Appeals for the 9th Circuit sided with a California worker who argued that "considering prior compensation when setting a worker's pay perpetuates gender disparities and defies the spirit of the federal Equal Pay Act."

The court agreed and said the meaning of the Equal Pay Act, which became law in 1963, is clear.

"Men and women should receive equal pay for equal work regardless of sex," wrote Judge Stephen Reinhardt. "The question before us is also simple: Can an employer justify a wage differential between male and female employees by relying on prior salary? Based on the text, history and purpose of the Equal Pay Act, the answer is clear: No."

Case facts: Woman had more experience, lower pay

The case arose in 2012 when a female employee of the Fresno County (California) School District sued her employer, the Fresno County Office of Education. She sued after learning her male colleagues made significantly more money than her, even though she had more experience.

The school district admitted that her salary was lower but argued that the discrepancy stemmed from her prior salary. 

"Before this decision, our law was unclear whether an employer could consider prior salary, either alone or in combination with other factors, when setting its employees' salaries," Reinhardt wrote. "We now hold that prior salary alone or in combination with other factors cannot justify a wage differential."

Law has since changed in four states

Since the filing of the case, four states (Massachusetts, California, Delaware, Oregon and Puerto Rico) have passed laws that prohibit employers from requesting an applicant's prior salary.

If you have questions about pay, compensation or salary negotiation, contact an experienced employment law attorney.

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