“How Much Did You Make in Your Last Job?”
While cities and states are passing laws that ban employers from asking prospective employees about their past wages and benefits, a recent ruling in the Ninth Circuit made it easier to do just that. In Rizo v. Yovina, the Ninth Circuit held that an employer may defend a claim under the Equal Pay Act by showing that its pay structure is based on employees’ prior salaries so long as this structure is reasonable and effectuates a business policy. The decision parts ways with other circuits that have discouraged using an employee’s prior pay, by itself, to justify pay decisions. Given the lack of consistency created by conflicting court decisions and emerging state and local laws, employers should tread carefully when deciding whether to ask applicants about prior salary, says Nilan Johnson Lewis labor and employment attorney Courtney Blanchard. “The bottom line is that employers shouldn’t rely on an interview question just because they consider it a ‘routine’ question.” Employers that use the “market rate” to justify pay decisions might have to rely on alternative methods rather than simply asking about prior pay, as well as basing pay decisions on other individual factors. “The solution involves interview training for recruiting and human resource professionals, and consistent audits of interview procedures,” says Blanchard. To speak with Courtney Blanchard on how employers can better understand rules and laws relating to prior wage gathering and related discrimination, contact her at email@example.com or call 612.305.7732.