On April 12, 2019, Maine’s Governor, Janet Mills (D), signed L.D. 278, a pay equity bill titled “An Act Regarding Pay Equality.” The law amends existing pay equity legislation and generally prohibits employer inquiries into the salary history of prospective employees until after an offer of employment has been made. Maine is the latest state in New England to pass legislation imposing this prohibition, following Massachusetts, Connecticut, and Vermont.
In its statement of findings and intent, the legislature affirmed that “when employers base compensation decisions on compensation history of a prospective employee, it directly perpetuates [ ] wage inequality.”1 Consistent with this articulated policy, L.D. 278 provides that an employer may not “use or inquire about” a prospective employee’s compensation history unless the employer has already provided an offer of employment that includes “all terms of compensation.” This prohibition likewise prevents an employer from soliciting a prospective employee’s salary history from his or her current or former employer.
An exception to this ban exists for employers obligated to inquire about a prospective employee’s compensation history consistent with state or federal law requiring “the disclosure or verification of compensation information.”
L.D. 278 further amends the Maine Human Rights Act (“the Act”) to expressly provide that evidence of unlawful employment discrimination includes an employer’s effort to directly, or indirectly, seek compensation information from a prospective employee before an offer of employment has been made. If an employee or prospective employee “voluntarily” discloses his or her compensation history “without prompting by the employer,” the employer may seek to confirm the information before it provides an offer. L.D. 278 also broadens the existing wage transparency protections in Maine’s equal pay statute to prohibit an employer from preventing employees from discussing, or disclosing, other employees’ wages.
While L.D. 278 may seem straightforward at first glance, the statutory text leaves open some questions concerning the “voluntary disclosure” exception to the salary history inquiry ban.2 For example, the exception applies to employees, as well as prospective employees, who voluntarily disclose wage history information. But the statute’s protections otherwise apply only to prospective employees, and L.D. 278 does not explain the inclusion of “employees” in this section. In addition, the voluntary disclosure provision does not appear in the same section as the other exception identified (i.e., the exception for inquiries needed to comply with state or federal law). Instead, it appears in the amendment to the Act concerning evidence of unlawful discrimination. Employers intending to rely on this exception may wish to consider proceeding cautiously in light of these ambiguities.
An employer that violates the statute may face a penalty between $100 and $500 per violation. The employer may also be subject to civil litigation brought by the affected employee or Maine’s Department of Labor.
The law takes effect on September 17, 2019. In the interim, New England employers should review existing job posting and hiring documentation to ensure salary history information is not solicited from applicants unless a statutory exception applies. Employers likewise should train hiring managers and recruiters to ensure they are aware of the statute’s prohibitions.