By Patricia A. Schaeffer, Vice President-Regulatory Affairs

Law professor Jeffrey Lax has written a thought provoking article in the New York Law Journal and published on that poses an interesting question for employers. If minority and women salaries have been historically depressed, do requests for salary history, which are used to set salaries in new positions, perpetuate discrimination?

Lax asserts that job applicants are unfairly prejudiced by salary history demands. He believes that in addition to unfair negotiation and privacy concerns that affect all applicants, demands for salary history are particularly discriminatory to women because historically depressed salaries and wages are perpetuated by the use of those figures.

Factor other Than Sex:
Lax discusses how both Title VII and the Equal Pay Act prohibit discriminatory pay practices, but both statutes permit a differential in pay among genders by an employer who can show that the disparity is “based on a factor other than sex.” Salary history has been construed as a “factor other than sex,” however, more courts are expressing “discomfort” with the use of salary history because of its “propensity to violate the very anti-discriminatory purpose of those laws.” Some courts have refused to consider salary history unless it is combined with a “legitimate business reason,” but Lax regards this as ineffective because it’s easy to find apparently legitimate reasons to justify the use of salary history to pay women less.

According to Lax, so far there has been no definitive clarification whether salary history is a “factor other than sex” under federal law. At the state level, however, the Montana Legislature in 2005 introduced a bill, which narrowly failed, precluding the use of salary history during the hiring process by state and local government agencies.

DCI Consulting Group will update clients on new developments on the use of salary history as they become available.

Summarized from the story “Are Employer Requests for Salary History Discriminatory?” by Jeffrey Lax in the New York Law Journal and published online by on March 9, 2007.

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