In an effort to combat wage inequality, Maine Governor Mills signed LD278, an amendment to the Maine Human Rights Act and Equal Pay Law. The amendment added a salary history ban (i.e., prohibiting employers for asking for current or previous salary from candidates) and expanded pay transparency. The passing of this legislature in 2019 made Maine the 8th state to enact a salary history ban.
Summary of the Amended Human Rights Act:
- An employer inquiring wage history of a prospective employee, whether it be directly or indirectly through an employment agency is considered evidence of discrimination with respect to compensation unless “an offer of employment that includes all terms of compensation has been negotiated and made to the prospective employee.” It is considered discrimination if the employer requires that the prior wage history meets certain criteria. If a prospective employee voluntarily discloses their wage history, without prompt from employer or employment agency, the employer may ask the prospective employee to confirm the information prior to an employment offer.
- Employers cannot prohibit employees from disclosing their own wages, or from inquiring about or disclosing another employee’s wages.
- Employers are prohibited from discriminating between employees on the basis of sex by paying an employee a lower rate than an employee of the opposite sex for work that is comparable in skill, effort, and responsibility. Pay differentials based on “established seniority or merit increase systems or difference in the shift or time of the day worked that do not discriminate on the basis of sex are not within this prohibition.”
What does this mean for employers?
As pay equity continues to be a concern for many legislators, many states have enacted salary history bans, with some states making strides towards full pay transparency. One of the main reasons that pay transparency and salary history bans are becoming more prominent is because they have been shown to help reduce gender and race-based wage gaps. Due to these changes, it is important for employers to evaluate their compensation practices and ensure that there are no pay discrepancies within comparable jobs. Conducting a robust pay equity analysis can help employers determine whether there are any pay differences based on demographics and where you can make necessary adjustments. This approach will not only keep employers ahead of the continuously changing legislature, but it will help take strides towards a more equitable workforce.