News & Insights

Delaware House Proposes a “Don’t Ask Candidates Their Compensation History” Law

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On April 4, 2017, the House of the Delaware General Assembly proposed HB 1, which is available here.

If this bill becomes law, it will prohibit a Delaware employer (as defined by the existing law – including a requirement of having 4 or more employees) from seeking from any prospective employee any information about the candidate’s monetary wages, benefits, or other forms of compensation. Such a Delaware employer would also be prohibited from requiring that a candidate’s prior compensation satisfy any minimum or maximum criteria. Thus, among many other examples, a Delaware employer would likely be found to violate such law by asking a candidate whether she or he had health insurance at the prior place of employment.

This bill proposes to include this new law in Subchapter 2 of Chapter 7, Title 19 of the Delaware Code. Unlike Subchapter 1, Subchapter 2 requires administrative exhaustion and thus permits the filing of a charge of discrimination with the Delaware Department of Labor (with a subsequent right to sue). An employer who, as a matter of standardized interview questions, asks a prohibited question could apparently face 99 charges of discrimination if interviewing 100 candidates and selecting only 1 as an employee. An employer relying on an outside recruiting company who asks a prohibited question also likely would face legal liability for the recruiter’s questioning of candidates.

Arguably, a law like this might be better placed in Subchapter 1 of Chapter 7, Title 19 of the Delaware Code or in the Wage Payment and Collection Act of the State of Delaware (e.g., 19 Del. C. § 1112). In both areas (unlike the present, proposed area of the Delaware Code), there is no administrative exhaustion requirement and no related charge of discrimination. If placed in one of those areas, a specific penalty could be articulated, perhaps per position (rather than per applicant), as is done for other technical violations.

However, the synopsis of this bill states that it is for the purpose of building “on some legislation passed by the 148th General Assembly that addressed the wage gap between men and women.” Therefore, some presumably will dispute that a violation should be considered only a technical violation. Nonetheless, there are ample examples of legitimate, non-discriminatory reasons why an employer might choose to ask for such information when selecting an employee or to impose such criteria (e.g., a desire to select the best talent for as little cost as possible; a belief that someone making more before would be unhappy making less now even if they say otherwise; etc.). Reasonable minds might disagree about whether such desire/belief is “fair” or whether placing a candidate in the position of needing to divulge compensation history is “fair.” Reasonable minds might also disagree about whether there are equally effective ways at getting at what an employer ultimately wants to know without asking about compensation history or imposing the proposed, prohibited criteria.

The bottom line is that, if this bill is passed into law, currently lawful choice about what to ask in interviewing or to require as qualification criteria will be removed from the marketplace. From the employer’s perspective, it will be one more way in which an employer can misstep and face legal liability (in this case, regardless of the employer’s motives in asking the prohibited question or in posing the prohibited criteria). From the prospective employee’s perspective, such law would present one more way to challenge his/her non-selection. For the Department of Labor, this law would present yet another form of discrimination to include in its Charge of Discrimination intake form.

In any event, all should take note of this bill and get involved in the legislative process if a strong opinion is held.

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