Overview. On June 14, 2017, Delaware enacted a law prohibiting prospective employers from asking job applicants about their salary history. Delaware joins Massachusetts, Oregon, New York City and Philadelphia in their ban on salary history inquiries.
Effective Date. December 14, 2017.
Details. Delaware already has two laws in place intended to close gender based pay gaps; 1) the Equal Pay Statute; and 2) the Discrimination in Employment Act.
Delaware’s Equal Pay Statute provides that an employer cannot pay an employee at a wage rate less than the rate at which an employee of the opposite sex in the same establishment is paid for equal work for a job the performance of which requires equal skill, effort and responsibility, and which is performed under similar working conditions. Del. Code Ann. tit. 19, § 1107A.
The Equal pay Statute permits a wage differential if that differential is based on:
· a seniority system;
· a merit system;
· a system that measures earnings by quantity or quality of production; or
· any other factor other than sex.
An employer that is paying a wage rate differential in violation of the statute cannot reduce the wage rate of any employee to comply with the statute.
Delaware’s Discrimination in Employment Act protects pay transparency by making it unlawful for an employer to:
· require, as a condition of employment, that an employee refrain from inquiring about, discussing, or disclosing his or her wages or the wages of another employee;
· require an employee to sign a waiver or other document which purports to deny an employee the right to disclose or discuss his or her wages; or
· discharge, formally discipline, or otherwise discriminate against an employee for inquiring about, discussing, or disclosing his or her wages or the wages of another employee.
This provision does not create an obligation for an employer or employee to disclose wages.
Delaware’s newest pay equity law prohibits an employer or its agent from “screen[ing] applicants based on their compensation histories, including by requiring that an applicant’s prior compensation satisfy minimum or maximum criteria” or “seek[ing] the compensation history of an applicant from the applicant or a current or former employer.”
Under this new law, Delaware employers will be prohibited from making salary history inquiries. “Compensation” is defined broadly to include wages as well as “benefits and other forms of compensation,” though the definition does not further clarify what is included in “other forms of compensation.” The law does not specifically prohibit employers from setting compensation based on prior salary history, if a job applicant voluntarily discloses his or her prior compensation history.
The new law makes clear that an employer or its agents may discuss and negotiate with job applicants about their compensation, so long as the employer or agent neither requests nor requires the applicant to provide salary history information. Nor does the law expressly prohibit voluntary discussions of past salary history. Finally, employers can obtain compensation history for the sole purpose of confirming an applicant’s compensation history if the employer first extends an offer of employment that includes the terms of compensation.
The new law explicitly states that an employer will not be liable for the acts of its agent (who is not an employee) provided the employer can demonstrate that the agent was informed of the requirement of the law and instructed to comply.
Importantly, the new law clarifies that “interviewing and hiring for a single position shall constitute a single violation.” In other words, if an employer uses an application or interview questionnaire that asks a prohibited question for a single position, this would be considered a single violation regardless of the number of job applicants that may be subject to the prohibited question.
Call to Action. Employers should review and revise job applications and related forms to comply with new restrictions. Employers should also train recruiters, particularly agents who are not employees, and employees who interview or screen applicants, regarding the impact of the new law.
Based on content delivered by Littler Mendelson, P.C.