Legal Series, Part 2: The Fair Pay Act

Legal Series, Part 2: The Fair Pay Act

In today’s second installment of our legal advice series, I’ll discuss the new law that’s rolling out across the nation: the Fair Pay Act.
View Open Positions
Schedule a Consultation
Today’s topic is the second part of my new series in which I confer with you key info about various legal topics in the recruiting world. The Fair Pay Act has been rolling out nationwide, but what does it entail? I’ll give you the latest updates on where that is headed, in case you’re unfamiliar with the topic. Before we begin our discussion, though, please note that we are not attorneys and that this information is not to be taken as legal advice.

The age-old discussion of pay inequality between men and women is still alive today. The questions are, “Why is there inequality?” and, “What do we do about it?”

A proposed solution to pay inequality, as laid out in the Fair Pay Act, would be to discourage asking candidates about what they’re making during the interview process. If you ask them what they’re currently earning, the concern is that they will then tell you and you’ll start from there in the wage negotiation process, furthering whatever inequality already exists.

So what does that mean for us in terms of our interview process? It means that no forms can be disseminated to candidates on which they’re asked about their income, and you can’t ask them for their W-2s as a means to see their pay stubs.

If you ask them what they’re currently earning, the concern is that they will then tell you and you’ll start from there in the wage negotiation process, furthering whatever inequality already exists.


You can, however, ask a candidate how much they’re looking to make; they’re completely free to volunteer any information about their current pay, and you’re allowed to take note of that and use it in the negotiation process.

Here is an updated list of the states that have rolled out the Fair Pay Act:

  • California
  • Connecticut
  • Delaware
  • Hawaii
  • Massachusetts
  • Oregon
  • Puerto Rico
  • Vermont

 

In New York, two counties have also adopted the Act:

  • Westchester
  • Albany

 

The same is true of certain individual cities:

  • San Francisco
  • New York City
  • Philadelphia (However, Philadelphia is currently challenging it in the higher courts)

To see more details on what the Fair Pay Act entails, including some FAQs, visit the National Committee on Pay Equity website here.

If you have any questions about the changes that the Fair Pay Act might cause in your business, please feel free to reach out to us. We look forward to hearing from you.

Leah Yosef International is the Private Wealth and Investment Management search division of Sanford Rose Associates, recognized by Executive Search Review as being one of the Top 10 Search Firms in North America with 90+ Offices worldwide. To learn more, please reach out to your Leah Yosef International executive search consultant today. Schedule A Consultation