Salary History Prohibitions Come to Maine

On April 12th, Maine joins a growing list of jurisdictions, including California, Connecticut, Delaware, Hawaii, Massachusetts, New York City (as well as other cities within New York) Oregon, Puerto Rico, and Vermont, that restrict private employers from obtaining salary history information from job candidates and applicants. Within the Northeast region, only Rhode Island and New Hampshire have yet to enact comparable regulations in the public or private sectors, with a bill, HB 221, presently pending before the New Hampshire legislature.

LD 278, “An Act Regarding Pay Equality” amends the Maine Human Rights Act to add 26 MRSA §628-A, making it unlawful to seek or rely upon compensation history during the hiring process. Like other comparable state and local laws, the Maine legislation prohibits salary history inquiries “unless an offer of employment that includes all terms of compensation has been negotiated.” The new statute explains that an employer may not elicit such information either from a prospective employee, or from a prospective employee’s current or former employer. After extending an offer of employment including compensation, an employer may inquire into or verify an individual’s prior wages. Similar to other salary history bans, Maine’s new law exempts from this prohibition salary history information sought “pursuant to any federal or state law that specifically requires the disclosure or verification of compensation history for employment purposes.”

The Act also adds 5 MRSA §4577, which provides that it will be considered evidence of discrimination under the Maine Human Rights Act and the Maine Equal Pay Law to inquire, “either directly or indirectly, about the compensation history of a prospective employee from the prospective employee or a current or former employer of the prospective employee or otherwise seeking the compensation history of a prospective employee.”

Importantly, there is an exception to this provision that allows employers to confirm compensation history when that information is voluntarily disclosed, and without prompting, by the candidate. In what seems to be an ambiguity in the law, however, the Maine legislature did not carry this same voluntary disclosure exception into the amendment to the Maine Human Rights Law. This failure to use the same language in both newly enacted provisions leaves employers with questions about how they can utilize salary history information that was voluntarily disclosed. In other words, although it is clear that it will not be considered evidence of unlawful discrimination to verify voluntarily disclosed compensation history information, it is less clear as to whether that information can be relied upon in determining compensation before an offer has been made to a prospective hire.

Incorporating the penalties provision from other sections of the Maine Human Rights Act, the new act provides for fines ranging between $100 and $500 for each violation of the statute and exposing employers to civil actions by individuals and the Maine Department of Labor. The law becomes effective ninety days after the conclusion of Maine’s 129th legislative session, which is projected for September 17, 2019.

Maine’s new legislation serves as a reminder to employers that the national equal pay wave is still cresting. With over one-fifth of the U.S. population now falling under the ambit of one or more compensation history prohibitions, employers, and particularly multi-jurisdictional employers, should continue to assess and reevaluate their recruiting and hiring practices.