Starting on March 1, 2024, Columbus will join over 40 states, counties, and cities, including Cincinnati and Toledo, in prohibiting employers from asking applicants about wage rates or salary history. The Columbus ordinance’s stated purpose is to eliminate hiring practices that “perpetuate … systemic discrimination related to the wage gap and wealth gap for women, especially women of color.” According to wage statistics, in 2022, women made approximately 84 cents compared to each dollar earned by men. Black, Hispanic, and Asian women made 67 cents, 57 cents, and 92 cents, respectively, compared to white non-Hispanic men.
The new law encourages employers to extend job offers based upon what the applicant is worth, rather than the amount at which they’ve been valued in the past or the lowest amount the employer can pay to secure the applicant. According to data, salary history bans can result in 6-8% higher pay for workers of color, and can reduce the pay gap between white workers who changed jobs and non-white workers who changed jobs by as much as 68%.
Columbus’ ordinance applies to employers with 15 or more employees, that are headquartered in Columbus or have a Columbus office, and to any position for which the majority of the work will be performed in Columbus. “Employer” includes job placement and referral agencies, and other employment agencies that act on behalf of covered employers. The new ordinance makes it an “unlawful discriminatory practice” for a covered employer to:
- Ask applicants about their salary history, including asking questions or making statements to the applicant or his/her current or former employers, and searching public records to obtain the applicant’s salary history
- Screen applicants based on their wage and benefits histories
- Rely solely on salary history in deciding whether to offer employment, or in basing salary and benefits on that history
- Refuse to hire or otherwise disfavor or retaliate against an applicant for declining to disclose their salary history
The Columbus law does allow employers to engage in discussion with the applicant about the applicant’s salary expectations and to inform the applicant of the proposed or anticipated salary for the position for which they applied. That said, the salary history ban does not apply to:
- Inquiries about objective measures of the applicant’s productivity, such as revenue, sales, or other production reports
- Actions taken by an employer under any federal, state, or local law that authorizes the reliance on salary history to determine an employee’s compensation
- Applicants for internal transfer or promotion
- Voluntary, unprompted disclosures of salary history information by the applicant
- Any attempt by an employer to verify an applicant’s disclosure of non-salary related information or conduct a background check, provided that, if the verification or background check discloses the applicant’s salary history, that disclosure must not be solely relied upon to determine the salary, benefits, or other compensation of the applicant
- Applicants who are re-hired by the same company within three years of the most recent date of separation from that employer, if the employer already has past salary history data about the applicant
- Positions for which compensation and benefits are established through a collective bargaining agreement
- Federal, state, and local government employers, other than the City of Columbus
Unlike Toledo’s and Cincinnati’s ordinances, the new Columbus law does not require employers to share the pay scale for the position with applicants after a conditional offer of employment.
The law contains a complaint mechanism that, if substantiated, could result in the assessment of a civil fine of up to $5,000 against an employer.
Employers with a presence throughout the state or across state lines should familiarize themselves with these differing and rapidly evolving laws, or may wish to adopt recruiting practices that are compliant with the strictest of these. Employers should also consult with legal counsel to promptly review and possibly revise job applications, ensure that outside recruiters are in compliance, train hiring managers about the new requirements, and update their policies and procedures to ensure compliance and avoid fines.
