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Future uncertain for Md. salary history bill

‘You should be talking with your significant other about finances regularly,’ says Anna Vitelli of PNC Bank. ‘That can go from big-ticket item purchases to long-term investments.’ (Thinkstock)

(Thinkstock)

A bill seeking to close the wage gap between men and women in Maryland must overcome an unfavorable report from a Senate committee if it has any chance of becoming law.

Senate Bill 404 would require employers with 15 or more employees to include salary information in job announcements and prohibit certain employers from seeking salary history information from prospective employers during the interview process.

A cross-filed version of the legislation, House Bill 398, passed 94-47 last week and is slated for a hearing before of the Senate Finance Committee on March 30. But the committee on Thursday gave the bill an unfavorable report.

“Because of the all the activity surrounding this year’s passage of the earned sick leave and other bills that they (the committee) wanted to give it a little bit more attention and they believe that they would certainly look at it next year,” said Sen. Susan C. Lee, D-Montgomery and the bill’s sponsor, on Thursday about the committee vote.

Women and minority groups see past salary disclosure trap those with lower past salaries in a perpetual cycle of pay discrimination, regardless of the applicant’s qualifications.

“Asking for salary history information really perpetuates a discriminatory cycle,” said Michelle Siri, executive director of the Maryland Women’s Law Center. “If a person’s salary was discriminatory in one place, it follows them even unintentionally.”

Similar legislation has been passed in other parts of the country, with Massachusetts passing the first of its kind last year. In January, Philadelphia became the first major U.S. city to pass such a law. New York state, New York City and New Orleans are all considering similar legislation.

Lee sponsored the bill to bolster legislation passed last year that prohibits businesses from retaliating against employees for discussing salaries.

“Women are unable to start a new job on equal footing if salary is being negotiated using a past discriminatory salary as a baseline,” she said last month during a hearing before the Finance Committee last month. “Maryland has to be a leader in securing for all its citizens a workplace that promotes transparency, fairness, merit and productivity.”

The bill prevents employers from seeking salary history for an employee, to screen an applicant based on his or her salary history, or require an applicant provide salary history as a condition to get an interview or to get a job offer. Employers can ask for an applicant’s salary history once the employer has made an offer that specifies the applicant’s salary and the applicant gives the prospective employer permission to access that information, the bill states.

An employer is not allowed to disclose wage information that violates those bill provisions.

Businesses opposed

If passed, the bill would enforced by the state Department of Labor, Licensing and Regulation’s Division of Labor and Industry by expanding the existing equal pay law. Legislative analysts say the department cannot absorb the additional work with its existing resources and would have to get additional staff to manage the inquiries and complaints prompted by the bill. The bill would draw about 1,000 complaints of violations per year and cost the state around $560,000, analysts said.

Siri said the legislation is more proactive than other anti-discrimination laws from an enforcement perspective.

“It prevents the discrimination from ever happening in the first place,” she said.

While proponents see the bill as a way to close the wage gap between women, minorities and their white, male counterparts, opponents say the bill will hurt the negotiation process and increase costs for small businesses.

“There are a wide variety of factors that employers think about when they employ folks,” said Cailey Locklair Tolle, president of the Maryland Retailers Association, at the committee hearing last month. “To solely say pay discrepancies that exist because of pay discrimination is not true.”

Tolle made similar comments at a House Economic Matters Committee hearing on the bill.

Mike O’Halloran, Maryland state director for the National Federation of Independent Business, told legislators the bill would be onerous for small businesses and merely rehashes last year’s equal pay law.

“We’re not here to re-litigate what we passed last year,” he told the House Economic Matters Committee. “It’s making the hiring for Maryland small businesses very hard.”

Opponents also argued that there is nothing currently stopping an employee from asking a prospective employer what a job pays.

The Restaurant Association of Maryland is particularly concerned about the salary reporting requirement for employers with more than 15 workers, saying that adding a salary in a job posting would make it more expensive for restaurants to advertise job openings, according to association president Melvin Thompson.

One thing both sides agreed on was the wage gap persists and is particularly apparent among minority women.

In Maryland, the average female worker makes 83.6 cents on the dollar compared to their male counterparts, according to the National Women’s Law Center. That number is even lower for African American women, who make 69 cents on the dollar, and Latina women, who make 47 cents, according to the National Women’s Law Center.

“All of us understand that there is discrimination that exists in the world,” Tolle said.

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