Articles

Part Three in a Five-Part Series originally published in the Fairfield County Business Journal on April 4, 2020

Since January 1, 2019, Connecticut has prohibited employers from asking prospective employees about their past wages, or the value of other types of compensation they received at their last job. The logic behind the law is by setting employees’ compensation levels based on what they were paid at their last job, employers may unknowingly or unintentionally perpetuate gender discrimination that began long ago. With this inquiry being so ingrained in the way employers have brought on new employees (not to mention how easy it is to forget this question is on many job applications), we have found many employers are either unaware of this new prohibition, or have simply forgotten it exists.  So, here’s what you need to know.

The Statute

In May 2018, then-Governor Dannel Malloy signed into law Public Act No. 18-8, “An Act Concerning Pay Equity.”  The law is part of the “Equal Pay” movement which has been sweeping the country aiming to bridge the gap between the genders and their respective paychecks. The law took effect January 1 of this year.

Under the law, an “employer” is any entity with one employee or more. An employer could be an individual, corporation, limited liability company, firm, partnership, public corporation, joint stock association, or voluntary association. While “prospective employee” is not defined by the statute, it would appear to encompass any individual who submits a job application or participates in an interview.

Under the law, employers cannot ask, either directly or through a third party, about a prospective employee’s prior salary/compensation. The law also prohibits asking about the value of other elements of their prior compensation structure, such as health insurance, stock options, retirement benefits, etc.) Notably, however, the prohibition does not apply if the prospective employee voluntarily discloses the information or if an employer is specifically authorized to make these inquiries by a federal or state law.

The Takeaway

Employers should review their applications to make sure there is no request for this type of information.  If you think you already checked once, check again.  Something like this can be easily missed.  Secondly, employers should review, and revise if needed, their hiring practices to ensure compliance with the law.  The Equal Pay Movement is huge right now, and more and more states and municipalities are passing these types of laws.  Before long, we expect these types of laws to be the rule, rather than the exception.