Dive Brief:
- For the second time in two years, Illinois' governor has vetoed legislation that would prohibit employers from inquiring about prospective employees' previous pay. Republican Gov. Bruce Rauner sent H.B. 4163 back to the Illinois House of Representatives with recommendations for improvement and said the bill would have his approval if the changes are put into place. The bill, like those adopted by several other states and cities, is aimed at eliminating wage gaps.
- Rauner suggested that the legislature add a "safe harbor," providing an affirmative defense for employers who are able to demonstrate that within three years of the start of a legal challenge involving salary history, the company undertook a self-evaluation of its pay practices and made progress toward eliminating wage differentials based on gender. The self-evaluation could be of the employer's own design so long as it was reasonable in light of the size of the company and reasonable in detail and scope, the governor suggested. If the employer demonstrates that it has completed the self-evaluation but cannot demonstrate that any steps were taken to address identified deficiencies, the company could be liable for civil fines up to $500 per employee affected if the employer has fewer than four employees or up to $2,500 per employee affected if the employer has four or more employees.
- Rauner said in his letter to the legislature that "Massachusetts already has established a best-in-the-country approach" to the issue and suggested that Illinois look to the state's law.
Dive Insight:
One of the bill's sponsors, Rep. Anna Moeller, a Democrat, said in a statement that she will attempt to override Rauner’s amendatory veto. However, the attempt by the legislature in 2017 to override the governor's veto of a similar bill was unsuccessful. The governor's suggested language leaves a few questions unanswered, some noted. It doesn't explain what would amount to a "self-evaluation," nor does the language define what progress towards eliminating wage differentials looks like.
Salary history bans in general have left employers with a lot of questions. At least one expert, however, suggests that companies look to New York City's guidance, perhaps the most robust to date.
Some employers, meanwhile, have undertaken voluntary steps to combat gender-based pay inequity. Salesforce said it conducted an equal pay assessment in 2015 and in 2017 and found that pay for both genders needed adjusting and spent $6 million to remedy the situation and pledged to continue monitoring it. And Amazon, unwilling to track the various state and local salary history bans, has stopped asking about pay history altogether. On the other hand, some of the biggest names in the business world, such as Google, Dell EMC and Oracle, have been hit with accusations of pay disparities.
HR practitioners can work to resolve pay gaps by reviewing organization pay practices, working with managers to flag disparities and conducting periodic audits. Experts also suggest that employers conduct pay audits with the help an attorney to ensure the information is privileged and not discoverable in litigation.