NWLC Testimony in Support of Salary History Legislation in Maryland

Testimony of Sarah David Heydemann
Legal Fellow, Workplace Justice
Andrea Johnson
Senior Counsel for State Policy
National Women’s Law Center
In Support of
HB 512-Labor and Employment—Pay Scales and Wage History Information
Before the Maryland House Economic Matters Committee
February 13, 2018

Thank you for the opportunity to submit this testimony on behalf of the National Women’s Law Center. The National Women’s Law Center has been working since 1972 to secure and defend women’s legal rights, and to help women and families achieve economic security. Equal pay is a vital concern for Maryland’s working families, who depend on women’s wages to achieve economic security. Yet, pay discrimination remains a persistent barrier to women’s economic success in Maryland, particularly for women of color who face some of the largest wage gaps in the country.

When comparing women of all races to men of all races, women in Maryland typically make 84 cents for every dollar made by men.1 Black women in Maryland make only 69 cents for every dollar made by white, non-Hispanic men2 and Native women make only 65 cents.3 The gap is even larger for Maryland’s Latinas, who make only 47 cents for every dollar made by white, non-Hispanic men—the fifth largest wage gap for Latinas in the country.4 The wage gap affects women as soon as they enter the labor force, expands over time, and leaves older women with a gap in retirement income. Over the course of a 40-year career, a woman who works full time, year round in Maryland, typically loses $402,960 to the wage gap.5

Maryland has a proud history of taking steps to make the promise of equal pay for equal work a reality for Maryland’s workforce. Maryland made important strides in strengthening its equal pay laws by passing the Equal Pay for Equal Work Act in 2016, but there are a number of employer practices that aren’t clearly prohibited by law that cause gender and racial pay disparities to be perpetuated. HB 512 gets at the heart of those practices by prohibiting employers from relying on job applicants’ salary history and by requiring employers to provide a pay scale for a position, at the request of an applicant.

I. Relying on Salary History Perpetuates Gender and Racial Wage Gaps

Employers’ use of salary history in the hiring and salary setting process can be harmful to many types of job applicants, but it has a disproportionately negative impact on women and people of color, who face conscious and unconscious discrimination in the workplace and, consequently, are paid lower wages, on average, than white, non-Hispanic men. When women are paid just 82 percent of what their similarly educated and experienced male peers are paid just one year after college graduation, relying on salary history unfairly and unjustifiably condemns women to perpetually depressed salaries throughout their career.6

There are several reasons why women, on average, will be responding to the dreaded “What is your salary history” question with lower prior salaries than men. And they have nothing to do with women’s skill, knowledge, experience, negotiation abilities, or fit for the job.

First, it is well-documented that women, and especially women of color, face overt discrimination and unconscious biases in the workplace, including in pay. For example, in a recent experiment where scientists were presented with identical resumes—one with the name John and the other with the name Jennifer—the scientists offered the male applicant for a lab manager position a salary of nearly $4,000 more.7 A study conducted by labor economists Francine Blau and Lawrence Kahn found that 38 percent of the wage gap remains unexplained even when accounting for factors like race, region, unionization status, education, occupation, industry, and work experience.8 Discrimination is thought to be a major cause of this unexplained gap. By using a person’s salary history to evaluate her suitability for a position or to set her salary, new employers allow past discrimination to drive hiring and pay decisions. Moving to a new job can be the best opportunity women have to increase their pay, but employers’ reliance on salary history forces women to carry pay discrimination with them from job to job.

Second, women are more likely to have worked in lower paid, female-dominated professions that pay low wages simply because women are the majority of workers in the occupation and “women’s work” is valued less.9 Relying on applicants’ salary histories to set starting salaries perpetuates the systemic undervaluing of women’s work, even where women are entering male-dominated or mixed-gender industries. We regularly hear about women who are doing the same work as their male counterparts and have comparable experience, but are being paid less because, for instance, the women’s past experience was in the non-profit or government sector, whereas the men’s was in the higher-paying private sector.

Third, women still shoulder the majority of caregiving responsibilities and are more likely than men to have to reduce their hours or leave the workforce to care for children and other family members.10 Asking about salary history harms women seeking to reenter the workforce or increase their hours, since their last salary may no longer reflect current market conditions or their current qualifications. In fact, in 2015, the federal Office of Personnel Management (OPM) issued a new policy discouraging government agencies from considering candidates’ prior salary in setting their pay, explaining that “[r]eliance on existing salary to set pay could potentially adversely affect a candidate who is returning to the workplace after having taken extended time off from his or her career or for whom an existing rate of pay is not reflective of the candidate’s current qualifications or existing labor market conditions.”11

Relying on salary history in the hiring process compounds the negotiation disadvantages and past biases that women and people of color experience. Research has documented that women who negotiate their salaries are already at a disadvantage because they are perceived as greedy, demanding, not nice, and less desirable candidates, leading to lower starting pay.12 And when a new employer requests a candidate’s prior salary information, they are likely to anchor salary negotiations around the prior salary, with only small room for adjustment,13 thereby further entrenching, even if unwittingly, gender and racial disparities in the candidate’s new salary.

Importantly, this reliance on salary history not only disadvantages women and people of color in negotiation and setting pay, it also negatively impacts subsequent raises, bonuses, and promotions that are tied to the employee’s initial salary. Over time, those lower salaries add up to huge losses that affect an employee’s and her family’s financial well-being and ultimately her retirement. The class action law suit Beck v. Boeing,14 settled in 2004 for $72.5 million, is a poignant example of this destructive dynamic. Boeing set the salaries of newly hired employees as their immediate past pay plus a hiring bonus which was set as a percent of their past salary. Raises were also set as a percentage of an employee’s salary. Boeing claimed it set pay based on a neutral policy, but since women had lower average prior salaries than men, these pay practices led to significant gender disparities in earnings that compounded over time and could not be justified by performance differences or other objective criteria.

Some employers automatically disqualify or compare applicants based on the assumption that an applicant with a lower salary is of lower quality than an applicant with a higher salary.15 But salary is not a neutral, objective factor. Several courts have rejected employers’ arguments that basing pay on salary history alone is a neutral “factor other than sex” justifying paying women less and lawful under the Equal Pay Act.16 These courts point to the fact that salary histories reflect historical discriminatory market forces.17 When women and people of color experience, on average, lower wages compared to white, non-Hispanic men, relying on salary history in this way serves to perpetuate the underrepresentation of women and people of color in many workplaces and positions.

Given the role that relying on salary history plays in perpetuating and institutionalizing gender and racial disparities, it is not surprising that the Equal Employment Opportunity Commission (EEOC) Compliance Manual on compensation discrimination has instructed since 2000 that reliance on prior salary alone cannot justify a compensation disparity.18 The EEOC explains that “permitting prior salary alone as a justification for a compensation disparity ‘would swallow up the rule and inequality in compensation among genders would be perpetuated.’”19 Nevertheless, many employers continue to rely on salary history in setting pay and some courts have broken with the EEOC’s position on salary history, and have permitted employers to rely on employees’ salary history to justify paying women less for the same work.20 This makes it all the more important to enact legislation clearly banning the harmful use of salary history in the hiring process.

Lastly, employers who use salary history to screen applicants unfairly block many other types of qualified applicants from much-needed employment opportunities. Relying on salary history can lead to depressed wages for individuals who have previously worked in the public sector or in nonprofits and are moving into the private sector. And it can deprive senior individuals with higher salaries who are looking to change jobs or re-enter the workforce the opportunity to be considered for lower paying jobs they might seek.21

II. Not Providing Applicants Salary Range Information Perpetuates Gender and Racial Wage Gaps

When an employer asks a job applicant what his or her salary expectations are without providing the applicant any information about the pay for the position, women and people of color lose out. Studies show that women often ask for less when they negotiate than men.22 This is true even when the women applicants are otherwise equally qualified and applying for similar jobs as their male counterparts.23 Moreover, it is a common practice for job applicants to ask for an amount that is a 10 to 20 percent increase over their prior salary.24 Given that women and people of color are, on average, paid less than white, non-Hispanic men, they would have to request a particularly large percentage increase over their current pay for their request to be on par with their white, non-Hispanic male counterparts, which they are unlikely to do given the anchoring effect of their current or previous pay.

Many employers, especially in the private sector, are not transparent about pay ranges for positions even though, according to a study by, 85 percent of employers use pay ranges to structure compensation programs.25 Even if they don’t have established pay ranges, all employers must budget an amount for the position for which they are hiring. But when employers hold all of the salary information, they are at a significant advantage in negotiating the lowest possible salary and women and people of color lose out.

Fortunately, studies show that when job applicants are clearly informed about the context for negotiations, including the types of compensation, benefits, or conditions that are negotiable, or the typical pay for the position, women are more willing to negotiate, more successful in negotiating, and the gender wage gap narrows.26 The much narrower wage gap in the public sector – where agencies typically have transparent and public pay structures – is further evidence that greater pay transparency helps reduce wage disparities. Nationally, the gender-based wage gap for all full-time workers, based on median earnings, is 20 percent, but in the federal government, where pay rates are publicly available,27 the gender-based wage gap in 2012 was 13 percent.28 Since employers tend to anchor salary negotiations, consciously or subconsciously, on the job applicant’s first request, providing applicants with a salary range that the employer is willing to pay helps level the negotiating playing field and reduces gender and racial wage gaps.

III. HB 512 Would Play an Important Role in Closing Persistent Gender and Racial Wage Gaps

HB 512 would play an important role in breaking the cycle of wage discrimination and closing the wage gap in Maryland.

A. Ending the detrimental reliance on salary history

Under the bill, an employer is prohibited from relying on the prior salary of a job applicant or employee in screening or considering the applicant for employment or in determining his or her wages. Nor can an employer seek the salary history from an applicant or from an applicant or employee’s former employer. These provisions will help ensure that job applicants are evaluated and compensated based on their skills for the jobs to which they have applied, not their gender or race, nor their apparent value to a previous employer or other factors unrelated to an applicant’s fit for the job. In other words, the bill ensures that employers pay employees for their new job, not their old one. The bill does provide, however, that an applicant or employee may voluntarily provide their salary history and the employer may rely on that information to support paying a higher wage than that offered by the employer.

B. Requiring disclosure of the salary range for a position, upon request

HB 512 would also require employers to provide the pay scale for a position, upon request of the applicant. Employers know the range they are willing to pay for a position based on their budget. This bill simply requires employers to be transparent about that range for a particular position, upon an applicant’s request.

The bill will help level the playing field for negotiating pay to ensure that women and people of color are paid a fair salary based on what the job is worth. This provision builds on Maryland’s commitment to pay transparency and is a crucial addition to the pay transparency protections Maryland enacted two years ago ensuring that employees can discuss their pay with each other free from fear of retaliation.

IV. Relying on Salary History Information and Not Providing Pay Information Are Not Necessary or Good Business Practices.

HB 512 would not only benefit working people in Maryland, it would put an end to business practices that, while common, are neither necessary nor good for employers’ bottom line. Asking for a job applicant’s past salary is not an effective way to determine an applicant’s worth or “market value.” As discussed above, salary is not a neutral, objective factor; it can often be misleading and influenced by discriminatory forces. Employers are better served by evaluating job applicants’ experience, skills, accomplishments, track record, and the responsibilities they will be assuming to determine their value.29

Nor is a job applicant’s prior salary an efficient or accurate measure of a job’s market value. Many companies keep detailed information about pay ranges for a large variety of jobs in a variety of geographic regions.30 And most large corporations already have set ranges for a job’s pay.31

Employers also often contend that they need to ask job applicants for their prior salary so as to not “waste time” interviewing someone who would not accept the position because the salary is too low. But employers can achieve the same efficiency goals by providing job applicants the salary range for a position early in the hiring process and ask for the applicant’s desired salary without the introducing information into the hiring process that perpetuates gender and racial wage gaps.

In addition, the discriminatory impact of screening out job applicants based on their prior salary reduces the pool of diverse talent available to an employer directly undermining employer efforts to diversify their workforce. But a diverse workforce and equitable employment practices can confer a wide array of benefits on a company, including decreased risk of liability, access to the best talent, increased employee satisfaction and productivity, increased innovation, an expanded consumer base, and stronger financial performance.32

Likewise, eliminating pay practices that many employees recognize as deeply unfair and increasing transparency around pay for a position benefits employers’ bottom line because it increases the likelihood that employees will believe they are paid fairly, which in turn promotes employee engagement and productivity.33

Recognizing these benefits and the unfairness of relying on salary history—and the increasing number of states banning this practice—companies like Bank of America, Amazon, and Wells Fargo have recently foregone the practice of relying on salary history, opting instead to “figure out what the job is worth, not the person.”34 And some companies are also making salary information available to both employees and the general public.35 One of these, GoDaddy, includes salary level and range for a given position on each employee’s pay statement.

V. By Passing HB 512, Maryland Would Join a Growing Chorus of States Seeking to Ban Reliance on Salary History

In August of 2016, the Massachusetts legislature unanimously passed, and Republican Governor Charlie Baker signed into law a bill banning employers from seeking a job applicant’s prior salary history before extending a job offer.36 The Massachusetts bill was enacted not only with strong bipartisan support, but with the support of many in the Massachusetts business community, including the Greater Boston Chamber of Commerce, and the Marlborough and Metrowest Chambers of Commerce.37

Since the passage of Massachusetts’ law, Delaware, Oregon, California, and Puerto Rico have all recently passed similar legislation, as have New York City, San Francisco, and Philadelphia.38 Governors in New Jersey and New York have also stepped up to issue Executive Orders banning the use of salary history in setting pay for state employees and New Orleans and Pittsburgh has prohibited reliance on salary history in city employment.39

In 2017 alone, nearly half of the states considered legislation banning reliance on salary history in the hiring process. And in Congress, the Paycheck Fairness Act and the Pay Equity for All Act include prohibitions on employer screening job applicants based on their salary history or requesting applicants’ salary history.40 States are also increasingly considering provisions requiring employers to provide the salary range for a position, and in 2017, California enacted a such a law as part of a bill banning employers from relying on salary history.41

VIV. Conclusion

Stopping employers from relying on salary history and requiring them to provide applicants with pay scales upon request are important steps to close the wage gap. And since the wage gap has barely budged in more than a decade, we need to take action now. We urge the members of this Committee to once again stand up for working people in Maryland by supporting HB 512.

2 Id.
3 Id.
4 Id.
5 NWLC calculations based on U.S. Census Bureau, 2015 American Community Survey, available at
7 Corrine A. Moss-Racusin et al., Science Faculty’s Subtle Gender Biases Favor Male Students, Proceedings of the National Academy of Science of the United States of America (Aug. 2012),
8 Francine D. Blau & Lawrence M. Kahn, The Gender Wage Gap: Extent, Tends and Explanations, NATIONAL BUREAU OF ECONOMIC RESEARCH (Jan. 2016),
9 Philip N. Cohen, Devaluing and Revaluing Women’s Work, Huffington Post (April 3, 2010), devaluing-and-revaluing-w_b_444215.html.
10 Nat’l Women’s Law Ctr, Moving Women and Families Forward: A State Roadmap to Economic Justice 37 (Mar. 2016),
11 July 30, 2015, Letter from Beth F. Cobert, Acting Director, U.S. Office of Personnel Management,
14 Beck v. Boeing, Court-Approved Consent Decree 30, 35-36 (W. D. WA. Oct. 8, 2004)),; see also Institute for Women’s Policy Research, Ending Sex and Race Discrimination in the Workplace: Legal Interventions That Push the Envelope 72-83 (March 2011).
15 June Bell, He Earned, She Earned: California Bill Would Limit Use of Salary Information, SHRM.ORG. August 29, 2016, (“salary history ‘is one component businesses look at to see if candidates are equally qualified.'”); Jena McGregor, The Worst Question You Could Ask Women in a Job Interview, WASHINGTON POST (April 14, 2015), (“Higher salaries also have what’s known as a “branding” impact. Just as consumers think pricier products are better quality, recruiters and managers can have the same reaction when a job candidate has a higher past salary, Anderson explained. ‘It may trigger a conviction that one hire is lower quality than another, even if that isn’t the reality.'”).
16 See, e.g., Cole v. N. Am. Breweries, No. 1:13-cl-236, 2015 WL 248026, at *10 (S.D. Ohio Jan. 20, 2015) (citing Irby v. Bittick, 44 F.3d 949, 955 (11th Cir. 1995) (finding that that a beer distributor improperly used a female hire’s previous salary to set her pay significantly lower than that of her male predecessor, her male successor, and other male employees performing the same job); Glenn v. General Motors Corp., 841 F.2d 1567, 1571 (11th Cir. 1988) (prior salary alone cannot justify a pay disparity); Faust v. Hilton Hotels Corp., 1990 WL 120615, at *5 (E.D. La. 1990) (reliance on prior salary as a factor other than sex would “allow employer to pay one employee more than an employee of the opposite sex because that employer or a previous employer discriminated against the lower paid employee”)). Angove v. Williams-Sonoma, Inc., 70 F. App’x 500, 508 (10th Cir. 2003) (citing Irby to find that the EPA “precludes an employer from relying solely upon a prior salary to justify pay disparity”).
17 See, e.g., Glenn v. General Motors Corp., 841 F.2d 1567 at 1570; Faust v. Hilton Hotels Corp., 1990 WL 120615, at *5, n. 12; Angove v. Williams-Sonoma, Inc., 70 F. App’x 500 at 507-508
18 EQUAL EMPLOYMENT OPPORTUNITY COMM’N, COMPLIANCE MANUAL, No. 915.003 § 10-IV.F.2.g (Dec. 2000), available at 19 Id. (citing Irby v. Bittick, 44 F.3d 949, 955 (11th Cir. 1995); Glenn v. General Motors Corp., 841 F.2d 1567, 1571 (11th Cir. 1988) (prior salary alone cannot justify a pay disparity); Faust v. Hilton Hotels Corp., 1990 WL 120615, at *5 (E.D. La. 1990) (reliance on prior salary as a factor other than sex would “allow employer to pay one employee more than an employee of the opposite sex because that employer or a previous employer discriminated against the lower paid employee”)). 20 Rizo v. Yovino, 854 F.3d 1161 (9th Cir.), reh’g en banc granted, 869 F.3d 1004 (9th Cir. 2017), argued Dec. 12, 2017, decision pending.
21 See Katie Donovan, Five Reasons Salary History Hurts Your Hiring Goals, HUFFINGTON POST, Sept. 8, 2015,
22 See Linda Babcock & Sara Laschever, WOMEN DON’T ASK: NEGOTIATION AND THE GENDER DIVIDE (2003); Jenny Save-Soderbergh, Are Women Asking for Low Wages? Gender Differences in Wage Bargaining Strategies and Ensuring Bargaining Success, Swedish Inst. Soc. Res. Working Paper Series 7/2007 10 (2007), available at
23 Id.
24 See Jacquelyn Smith, How Much Money to Ask for in a Salary Negotiation (May 22, 2015),; Melissa Phips, Interview Questions about Your Salary Expectations (Nov. 11, 2016),
25 PAYSCALE.COM, Attack of the Out-of-Date Comp Plan 13 (2015), available at
26 See, e.g., Hannah Riley Bowles, Linda Babcock & Kathleen L. McGinn, Constraints and Triggers: Situational Mechanics of Gender in Negotiations, 89 J. PERSONALITY & SOC. PSYCH. 951, 955-56 (2005).
27 See Pay & Leave, Salaries & Wages, OFFICE OF PERSONNEL MGMT. (2016),; Search Federal Pay, FEDS DATA CTR., (last visited Feb. 29, 2016).
28 U.S. OFFICE OF PERSONNEL MGM’T, GOVERNMENTWIDE STRATEGY ON ADVANCING PAY EQUALITY IN THE FEDERAL GOVERNMENT 2, 12 (Apr. 2014), (gender wage gap was 13 percent for all “white collar” workers (all pay plans) and 11 percent for workers on the GS scale only).
29 Alison Green, Massachusetts Makes Asking about Salary History a Thing of the Past, U.S. NEWS & WORLD REPORT, (Aug. 5, 2016),
30 McGregor, The Worst Question, supra note 15.
31 Id.
32 Hunt, V., Layton, D. & Prince, S., Diversity Matters 9-13, MCKINSEY & CO. (Feb. 2015) (finding diverse workforces correlate with better financial performance, because diversity helps to recruit the best talent, enhance the company’s image, increase employee satisfaction, and improve decision making, including fostering innovation); Hewlitt, S.A., Marshall, M. & Sherbin, L., How Diversity Can Drive Innovation, HARVARD BUS. REV. (Dec. 2013), available at
33 See Deborah Thompson Eisenberg, Money, Sex and Sunshine: A Market-Based Approach to Pay Discrimination, 43 ARIZ. STATE L.J. 951, 1001-15 (2011); LAMB, N. & KLEIN, W., A Proactive Approach to Wage Equality is Good for Business, EMPLOYMENT RELATIONS TODAY (Summer 2015), available at
34 McGregor, The Worst Question, supra note 15, Jena McGregor, Bank of America is the latest company to ban this dreaded job-interview question, WASHINGTON POST (January 29, 2018)
35 Nat’l Women’s Law Ctr, Employer Leadership to Advance Equal Pay: Examples of Promising Practices, (Mar. 1 2017)
36 S. 2107, 189th Gen. Ct. (Mass. 2016) (amending Mass. Gen. Laws Ch. 149 §§ 105A, 105B, 151).
37Massachusetts Equal Pay Coalition, Current Supportive Businesses, visited Nov. 28, 2016). 38H.B. 1, 149th Gen. Assemb. (Del. 2017),; H.B. 2005, 79th Leg. Assemb. (Or. 2017),; Assemb. B. 168, 2017- 2018 Reg. Sess. (Cal. 2017),; H.B. 9; Act 16-217, 2017-18 Sess. (P.R. 2017); N.Y.C. Admin. Code § 8-107 (2017); San Francisco Ordinance No. 142-17 (July 11, 2017),; Philadelphia Ordinance No. 160840 (Jan. 23, 2017),; see also, Anne Cain, 9 Places Where People May Never Have to Answer the Dreaded Salary Question Again, BUSINESS INSIDER (October 2017),
39NJ Exec. Order No. 1 (Jan 16, 2018),; NY Exec. Order No. 161 (Jan. 9, 2017),; New Orleans Exec. Order No. MJL 17-01 (Jan. 25, 2017),; Pittsburgh Ordinance No. 2017-1121 (Jan. 30, 2017), 59C275B74aa7&Options=id%7ctext%7C&Search=Salary+history&FullText=1
40 Paycheck Fairness Act, S. 819, 115th Congress; Pay Equity for All Act, H.R. 2418, 115th Congress
41 See A.B. 168, supra at 38.