By Alexia Elejalde-Ruiz
WWR Article Summary (tl;dr) Women’s advocacy groups say basing a new hire’s salary on previous compensation perpetuates disparities in pay between men and women, who may have been underpaid in the past.
Applicants for jobs with the city of Chicago can no longer be asked about their salary history, part of a growing effort nationwide to improve pay equality between men and women.
Mayor Rahm Emanuel signed the executive order Tuesday to mark Equal Pay Day, which symbolizes how far into the year women must work, on average, to earn as much as men did the previous year.
The order comes as Illinois lawmakers consider two competing pieces of legislation that aim to close the wage gap by prohibiting employers from asking job candidates what they’ve earned in the past, resurrecting the issue after Gov. Bruce Rauner vetoed such a bill last year.
It also comes the same week a federal appeals court ruled that employers can’t use salary history to justify pay disparities.
Women’s advocacy groups say basing a new hire’s salary on previous compensation perpetuates disparities in pay between men and women, who may have been underpaid in the past.
Women also tend to work in lower-paying jobs and are more likely than men to take time off or reduce hours to care for children or other family members, which affects prior salary levels.
Emanuel’s order prohibits city departments from requesting or seeking out a candidate’s salary history, and from screening applicants based on their prior wages, benefits or other compensation. The executive order also calls on the city’s sister agencies, such as the Chicago Park District, the Chicago Transit Authority and Chicago Public Schools, to enact similar prohibitions.
“By signing this executive order, we are taking action to say that this practice has no place in our city and taking a significant step towards closing the gender pay gap,” Emanuel said in a news release.
New Orleans Mayor Mitch Landrieu signed a similar executive order for his city employees in January 2017.
Measures banning prior salary questions, known as No Salary History laws, have been approved in a dozen states and cities, from Massachusetts to California, and many more have bills pending.
But other states have been pushing back. Michigan Gov. Rick Snyder in March signed a bill to block local governments from prohibiting employer questions about job candidates’ prior salaries.
Wisconsin’s legislature approved a similar bill preventing salary history bans in March and it is awaiting Gov. Scott Walker’s signature.
“I think there is a backlash,” said Brian Alcala, a partner in the employment law practice in the Chicago office of Nixon Peabody. “I think there will be more states that jump on the bandwagon with Michigan, the more business-friendly states or more conservative states will see more of it.”
Employers are not looking to pay women less than men, Alcala said, but they “don’t want to over-pay” and knowing prior salary helps them make an offer to lure a candidate from a competitor.
Illinois’ legislature approved a No Salary History bill last year but it was vetoed by Rauner, a Republican, who said he supports eliminating the gender wage gap but wants a more business-friendly law.
The bill, sponsored by Rep. Anna Moeller, D-Elgin, was reintroduced this year and approved by the House and now awaits committee assignment in the Senate. It faces competition from another bill, introduced by Sen. Jennifer Bertino-Tarrant, D-Shorewood, that supporters hope can gain the approval of the governor, who has suggested Illinois model its bill after the one in Massachusetts.
The second bill, currently in the Senate’s Labor Committee, protects violators from lawsuits and fines if they can show they have completed a self-evaluation of their pay practices and are making progress toward closing the gap.
Massachusetts’ law, which goes into effect in July, has a similar provision. But some women’s advocacy groups say it gives employers an out.
Rauner spokesman Rachel Bold said the governor has made recommendations and said his office was “encouraged to see similar concepts” in the Bertino-Tarrant bill, “but it would be premature (to) comment on legislation that could change significantly as it moves through the General Assembly. We will carefully consider any legislation sent to the governor’s desk.”
Meanwhile, the 9th U.S. Circuit Court of Appeals in California on Monday ruled in favor of Aileen Rizzo, a math teaching consultant who had sued the Fresno County Office of Education for paying her less than her male colleagues, writing in the opinion that “prior salary alone or in combination with other factors cannot justify a wage differential.”
That ruling contrasts with a federal appellate court ruling in the Seventh Circuit in Illinois in 2005, which found that it is not a violation of the Equal Pay Act to consider an employee’s wage history so long as sex is not a factor in determining salaries. In that case, Jenny Wernsing sued the Illinois Department of Human Services, where she worked as internal security investigator.
“It sets this up for a Supreme Court battle,” Alcala said.
Overall in Illinois, women who work full time, year-round earn 79 cents for every dollar a man earns, a yearly pay difference of $11,003, according to the National Partnership for Women and Families. The gap narrows considerably when comparing people with the same occupation, title, industry, education and experience, but women are consistently paid less than men across job categories, and research shows the disparity starts early.
Women just out of college earn 6.6 percent less in their first jobs than their male counterparts after controlling for personal demographics, occupation, college major, grade point average, hours worked and location, according to a 2012 report from the American Association of University Women, which cited bias or reluctance among women to negotiate salary as among possible reasons.
In the Chicago metro area, a woman earns 81 cents for every dollar a man makes, though the disparity varies widely by race and ethnicity. Latinas earn 43 cents for every dollar a white man earns, black women 57 cents, white women 73 cents and Asian women 86 cents.