Should employers ask for salary history? Ohio Democrat says it makes gender pay gap worse
Ohio Sen. Tina Maharath's first brush with pay inequity happened accidentally.
"I was having small talk and I realized this man, who had the same exact job as me, was making almost double my salary," Maharath said.
The lower salary followed her wherever she went. Every time the Canal Winchester Democrat applied for a new job, the application asked for her current wages.
She thinks that question is part of the reason why Ohio women still earn less than their male counterparts, so she introduced Senate Bill 70. It would ban employers from asking about a job applicant's salary history, and create a way for people to sue and recover damages for violations.
"It doesn’t prevent employers from supplying salary ranges or asking applicants what their expectations are or what they require," Maharath said.
Opponents say federal and state law already prohibit wage discrimination, and this bill would create more problems than it would solve.
"The U.S. Equal Pay Act, the U.S. Civil Rights Act, Ohio civil rights laws all provide remedies for employees when they are paid less because of their gender," Ohio Chamber of Commerce Director of Labor and Legal Affairs Kevin Shimp said.
Equal pay for equal work
Many of these places cited the desire to close the wage gap between men and women as well as the one between people of color and their Caucasian counterparts.
"Women of every race are paid less than men, at all education levels," Maharath said. "For example, an Asian American woman in Ohio makes 84 cents to every dollar that her white, non-Hispanic male counterpart earns."
She thinks part of the reason is that question: What are you earning? It allows employers to offer people less than they might have otherwise, she said. And the initial research appears to support her theory.
"Salary histories appear to account for much of the persistence of residual wage gaps," according to a 2020 study from Boston University.
The three researchers found that after cities and states implemented these bans, pay increases for job changes increased by about 5% overall. But women saw an 8% rise and Black Americans saw a 13% bump in their salaries.
What gives Shimp and the Ohio Chamber of Commerce pause is the part of SB 70 that would allow someone to sue and "recover damages sustained due to an employer’s violation, or for equitable relief, along with costs and reasonable attorney’s fees."
"It creates a new cause of action that may create legal liabilities for employers," Shimp said.
And paying people differently based on their race or gender is already illegal at both the state and federal levels.
That's why the chamber opposes SB 70.
Shimp also said that the differences between what men and women earn can be explained by other factors besides discrimination like total hours worked.
He cited the conclusion of a 2009 study from the U.S. Department of Labor:
"This study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers."
Data from the 2017 Bureau of Labor Statistics' annual report also found unmarried women earned substantially more than their married friends who had children.
Conservative groups like the Foundation for Economic Education say that "those lower earnings don’t necessarily result from labor market discrimination, they more likely result from personal family choices about careers, family friendly and flexible workplaces, commute time, child care, and the number of hours worked, etc."
What's next for Ohio
This isn't the first time Maharath has sponsored a bill to stop Ohio employers from asking about salary histories, but she hopes it will be the last.
She's open to amending the bill and said she's optimistic about its chances based on feedback from the chairman of the committee where the bill now sits. That's Sen. Michael Rulli, R-Salem, who didn't respond to a request for comment made through the Senate Republican spokesman.
"I think we can find a way to close the pay gap without punishing employers," Maharath said. "Democrats are always introducing legislation to reduce the pay gap, but I want to see what my colleagues on the other side of the aisle might accept."