Dive Brief:
- The federal government proposed a salary history ban for federal jobs Thursday.
- The regulations would forbid the government from considering previous salary history in setting pay for federal job offers, per a Wednesday press release from the U.S. Office of Personnel Management (OPM). That also would include administrative law judge and administrative appeals judge roles.
- The U.S. government often aims to set the tone for the future of work in corporate America: “These proposed regulations are a major step forward that will help make the federal government a national leader in pay equity,” OPM Director Kiran Ahuja said in the agency’s announcement.
Dive Insight:
Currently, Washington, D.C., Puerto Rico and 21 states have salary history bans. Apart from becoming on-par with nearly half of the U.S. and its territories, the proposed ban by the federal government has major implications for business.
Research continues to indicate that banning salary history questions narrows the gender and racial wage gaps — something the U.S. Department of Labor’s Women’s Bureau reiterated back in March. Equity experts previously told HR Dive the same.
“Relying on a candidate’s previous salary history can exacerbate preexisting inequality and disproportionally impact women and workers of color,” Ahuja said in the proposal announcement. “With these proposed regulations, the Biden-Harris Administration is setting the standard and demonstrating to the nation that we mean business when it comes to equality, fairness, and attracting the best talent.”
Pay transparency likewise remains a hot topic, with the launch of New York City’s salary transparency mandates last November. The laws have come with some unintended consequences, however, like goofy job ranges. Still, the intention of the law has produced positive results, research indicates, including greater equity and more honesty about existing inequities.
An employment lawyer working in a pay equity practice group told HR Dive that for employers to achieve equity, they must outline policies that clearly define promotion cycles, situations that merit raises and the pay bands available for each role.
From a compliance perspective, too, it’s important that HR has documentation explaining an employer’s compensation strategy, she noted.
