Business leaders are concerned local companies would struggle to comply with a bill pending before the D.C. Council that would bar employers from asking about salary history when making job offers.
The bill, introduced in September by council member David Grosso (I-At Large), seeks to prevent businesses from setting salaries based on pay history. Advocates say this practice exacerbates the nation’s gender pay gap because it discriminates against women who earn less than men from the start of their careers. Over time, even a small wage gap can result in significant lost income.
At a council subcommittee hearing Tuesday, Kathy Hollinger, president and chief executive of the Restaurant Association of Metropolitan Washington, said that if the bill becomes law, it would add to a growing burden on businesses.
“There are so many requirements and rules that it is virtually impossible for small-business operators to keep track of all of them and be in compliance,” said Hollinger, who said that employers should receive a warning instead of a fine after a first offense. And the city must also inform business owners of the law’s requirements, she said.
Barbara Lang, a consultant and former longtime head of the D.C. Chamber of Commerce, said employers need to know whether a prospective worker’s previous salary is in the same ballpark as the one they plan to offer. Otherwise, they risk making an offer drastically lower than the employee’s previous pay, she said.
“Then you’ve wasted their time and have to start the process all over again,” Lang said.
Another issue, she said, is that the law would force large corporations based outside the District to alter their personnel policies just for D.C. Companies could still hire workers in other jurisdictions and transfer them to the District, Lang said. And it might create less incentive to do business in the District, she said.
The legislation would amend the Wage Transparency Act of 2014, which makes it illegal for employers to forbid their employees to discuss wages with co-workers. The act designates that the mayor assess a civil fine of $1,000 for the first violation, $5,000 for a second offense and $20,000 for each subsequent violation.
The same enforcement procedure would apply to Grosso’s proposed amendment, which received co-sponsorship support from all but two council members, Kenyan R. McDuffie (D-Ward 5) and Chairman Phil Mendelson (D).
Economists and policy analysts at Tuesday’s hearing lauded the bill for attempting to close the wage gap, saying it could also aid businesses by saving them from discrimination claims.
Studies show that the District’s gender pay gap is one of the smallest in the nation. The nonprofit American Association of University Women (AAUW) found that the median salary for women in D.C. last year was $62,191, or about 86 percent of the $72,230 median for men. The District’s 14 percent wage gap was the fourth-best in the United States, which had a national wage gap of 20 percent.
But women of color earn much less than white men, both nationwide and within the District, according to the National Women’s Law Center. The organization found that black women in D.C. made 55.6 cents for every dollar earned by white men in 2014, while Latina women made 50.4 cents.
Requiring companies to post salary ranges would “empower” women to successfully negotiate fair wages, said AAUW policy analyst Kate Nielson.
Salary transparency could also help businesses because employees sometimes post their salaries on independent jobs sites, which companies cannot necessarily verify, said Ariane Hegewisch of the Institute for Women’s Policy Research.
“In a way, it is helpful to employers to take hold of that process rather than to leave it to happenstance in terms of who discloses their salaries on something like [the job site] Glassdoor,” Hegewisch said.
Council member Elissa Silverman (I-At Large) said requiring companies to post salary ranges is a “terrific suggestion.”
Hollinger, the restaurant association president, said the legislation should not move forward without “compelling evidence that it would positively affect the problem of disparate wages.”
Grosso acknowledged that the bill alone would not close the gender or racial pay gap. But he called it a small step toward improving the imbalance.
The bill mirrors similar legislation enacted in other jurisdictions, including Massachusetts, which became the first state to prohibit employers from requiring a job candidate’s salary history. Last month, New York City Mayor Bill de Blasio signed an executive order making it illegal for city agencies to require salary history in hiring.
On Tuesday, D.C. Del. Eleanor Holmes Norton and three other Democratic members of Congress asked President Obama to use executive action to prohibit federal contractors from seeking prospective employees’ salary history. Norton introduced a bill that would prohibit employers nationwide from inquiring about salary history before making a job or salary offer.
If the D.C. bill does not pass by the end of the year, Grosso could introduce a similar amendment next year, allowing the bill to go straight to the markup process.