Ask the Attorney: How Salary History Bans Affect Background Checks

We're excited to launch a new feature on our blog called "Ask the Attorney." Many of our readers have questions regarding the legal landscape when it comes to pre-employment and post-hire screenings, and no wonder: laws are constantly changing and incredibly complex to boot.

Melissa Snyder, FCRA-Advanced Certified from the Professional Background Screening Association (PBSA), is Good Egg's attorney and compliance manager. Melissa will be fielding occasional questions and answering them in a general way.

The big disclaimer, of course, is that any information she provides on this blog is simply educational in nature, not legal advice. You should consult your own attorney regarding your specific situation. Ideally, your background check provider should have an attorney on staff, as we do at Good Egg.

Now, onto the inaugural issue . . .

QUESTION:
I've been hearing more about salary history bans, a newer legislative trend that's restricting employers from asking about applicants' salary history, in an effort to eliminate gender-based salary disparities. It's reminding me of "ban-the-box" regulations. I'm curious what your thoughts are on the topic and how this trend will affect background checks.

MELISSA:
Salary history bans are definitely gaining traction and popping up all over the place. But I wouldn't say that the effects/changes to the background check process are anywhere near as vast or complex as ban-the-box.

However, there is one obvious area where these laws can affect background checks: it involves what can be asked—and what information can be returned—on employment verifications.

Historically, employers may want or expect to see current/prior salary be included in an employment verification check. However, an increasing number of jurisdictions at the state and local level have new or pending legislation that restricts the requesting or use of compensation information in making hiring decisions.

salary-bans[Source: HRdive.com]

Background screening companies that focus on keeping their clients compliant will remove this information from the verification before providing them a report. Compliant vendors will also inform their clients that they will not ask for this information if it is included as mandatory or preferred on the client's verifications questionnaire.

Employers themselves must ensure they are following the pay inquiry ban laws in the states and localities where they have employees. This is especially important during the application and interview process, which is sometimes more front of mind for employers.

A Word of Caution Regarding Salary History Bans

Where employers can get into trouble is thinking that their screening provider is keeping them compliant and not realizing that some vendors only care about complying with the laws that apply directly to background check providers, and not the laws (such as ban-the-box and pay history bans) that are ultimately the employer's responsibility to adhere to.

In light of this new legislative trend, employers should review their employment verifications processes with their screening providers to make sure illegal questions aren't being asked, and that impermissible information isn't being requested or inadvertently pushed through.

Even where a pay history question isn't directly asked, the individual or company providing the employment history information might deliver compensation information anyway. Some screening providers may actually think they are being helpful by including this information in the background check report. But if the screening company fails to redact compensation information from a pay stub or W-2 and that info makes its way into the background check report, this can lead to a violation by the employer who unknowingly uses or may consider that information during the hiring process.

Got a question for Melissa? Let us know!

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Melissa Snyder

Posted by Melissa Snyder

Melissa Snyder, FCRA Advanced Certified from the Professional Background Screening Association (PBSA), is Good Egg's Attorney and Compliance Manager. Not only is she an expert in the background screening legal landscape, she is also a lifelong Disney fanatic and is always on the hunt for hidden Mickeys.

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