Kansas City, Missouri joined the growing list of cities with salary history bans, aligning with a national trend that continues to gain momentum. On May 23, 2019, the city council passed Ordinance No. 190380—aimed to address the city’s reported 21.7% gender pay gap.1 The ordinance takes effect on October 31, 2019, and applies to any employer in Kansas City that employs six or more employees.2
What Will the Ordinance Restrict?
The ordinance generally prohibits employers from inquiring about an applicant’s salary history. The term “applicant” is defined broadly to include “any person applying for employment with an employer located in Kansas City, Missouri.” Presumably, therefore, the ordinance applies to any individual who has submitted an application for employment. The term “inquire” is also defined broadly as the act of communicating any question or statement to an applicant, the applicant’s current or former employer, or an agent or employee of the applicant’s former employer, or, to conduct a search of publicly available records, where such actions are undertaken “for the purpose of obtaining an applicant’s salary history.”
The ordinance also prohibits employers from screening applicants based on their current or previous wages, or other compensation, and prohibits employers from maintaining any requirement that prior wages meet minimum or maximum criteria. Similarly, employers cannot use past wage information to determine whether to offer an applicant a position or to determine the applicant’s salary or other compensation. Further, employers may not retaliate against, refuse to hire, or otherwise “disfavor” an applicant because the applicant refused to provide his or her salary history to the employer.
Similar to the salary history bans passed in other jurisdictions, the Kansas City ordinance includes several exceptions. Most importantly, the ordinance expressly allows employers and applicants to discuss an applicant’s expectations as they relate to salary, benefits, or other compensation, “including but not limited to unvested equity or deferred compensation that an applicant would forfeit or have cancelled by virtue of the applicant’s resignation from their current employer.” Additionally, an employer and applicant may discuss an applicant’s salary history if the applicant voluntarily, and without prompting, discloses his or her salary history.
Moreover, the salary ban excludes current employees who apply for internal job transfers or promotion. The ordinance further excludes former employees who apply for rehire within five years of their employment separation, where the employer maintains access to the former employee’s compensation history at the time of rehire. Employers may verify an applicant’s disclosure of non-salary-history information, or conduct a background check, as long as any salary history information the employer gathers through this verification process is not used to determine the applicant’s salary, benefits, or other compensation. Finally, the ordinance excludes all employees whose salary or compensation is determined pursuant to a collective bargaining agreement.
Salary History Bans—A National Trend
Kansas City’s ordinance adds to a growing list of states and localities that have implemented prohibitions on employer salary history inquiries within the last few years. The majority of this legislation generally prohibits employer inquiries into a job applicant’s past compensation, with limited exceptions.3
Within the last 12 months alone, Hawaii, Colorado, Connecticut, Maine, Suffolk County, New York, Cincinnati, Ohio, Vermont, and Washington have enacted legislation prohibiting employer inquiries into an applicant’s salary history, and further prohibiting employers from relying on an applicant’s salary history in determining the applicant’s salary, benefits, or other compensation.4 Salary history bans were enacted earlier in California, Delaware, Massachusetts, Oregon, Puerto Rico, San Francisco, California, New York City, New York, and in Albany and Westchester County, New York.5 Moreover, legislation has also been passed in Atlanta, Georgia, Illinois, Chicago, Illinois, Louisville, Kentucky, New Orleans, Louisiana, Montgomery County, Maryland, New Jersey, North Carolina, Pennsylvania, Pittsburg Pennsylvania, and Salt Lake City, Utah, that prohibit state agencies, or city agencies or departments, from requesting an applicant’s salary history.
In contrast, two states have bucked the trend by passing statewide restrictions on local salary history bans. In 2018, Michigan6 and Wisconsin7 passed legislation that prohibits localities from passing any ordinance or policy that would limit the information, or types of information, an employer may request from an applicant, including employer inquiries regarding an applicant’s past earnings or compensation. The stated purpose of this legislation is to eliminate the burden placed on employers when they are required to comply with differing ordinances, policies, and resolutions governing the application and interview process throughout the state.8
Whether other states and localities follow this growing trend, or seek to create their own path, we will continue track developments in this area. Employers are advised to evaluate their hiring and interview documentation, and compensation practices, to ensure that they align with applicable jurisdictional laws and ordinances.