Maine Employers Are Prohibited from Using or Inquiring about Employment Applicant’s Compensation History

On Friday, April 12, 2019, Governor Mills signed a bill prohibiting employers from using or asking about a prospective employee’s compensation history “unless an offer of employment that includes all terms of compensation has been negotiated and made to the prospective employee, after which the employer may inquire about or confirm the prospective employee’s compensation history.” Limited exceptions include when: state or federal law requires compensation history disclosure or verification for employment purposes, or when an applicant or employee voluntarily discloses their compensation history without prompting from the employer. In these cases, the employer may seek to confirm or permit the employee to confirm the information prior to making an employment offer.

As a practical matter, this means that most employers can no longer ask about, or require a prospective employee to disclose, their compensation history or ask an applicant’s current or former employer(s) about the applicant’s compensation history. Violations of this law could subject an employer to civil penalties of $100-$500 and potential legal and/or administrative action under 26 MRSA 626-A. The new law also specifically states that direct or indirect inquiries about an applicant’s compensation history will be considered evidence of unlawful discrimination under the Maine Human Rights Act, 5 MRSA 4572 and Maine’s Equal Pay provision, 26 MRSA 628.

Although the law does not define what is meant by “compensation history,” employers should, at a minimum, review their application materials to remove any request for information regarding pay or benefits history, refrain from asking about prior pay or benefits during the application or interview process, and train interviewers and those in charge of making job offers on the new law.

Our Employment and Labor Group is here to answer any questions that you may have.