Shannon Pierce, an employment and labor attorney at Fennemore’s Reno branch, left, and Philip Mannelly, an employment attorney at McDonald Carano in Reno.
Your next salary offer might look nothing like your current pay, due to a new law in the Silver State.
On Oct. 1, Nevada became the latest state to prohibit public and private employers from asking about a jobseeker’s salary or benefits in a previous role.
Under the new law, Senate Bill 293, employers are also required to provide the wage and salary range to applicants they interview as well as existing employees who apply for promotions or transfers.
The move stems from a slew of new laws around the U.S. aimed at closing wage gaps in the workforce. The theory behind them is that using past salaries to benchmark future pay can perpetuate unfairly high or low wages that workers carry from job to job, says Philip Mannelly, an employment attorney at McDonald Carano in Reno.
“It’s a trend throughout other states implementing similar laws, with the goal of combating historical pay inequities,” Mannelly says. “So what employers cannot do is seek out or ask for past employment wages or salaries. And they can’t make employment decisions based on a candidates refusal to provide past history.”
Even if a prospective candidate voluntarily discloses their former earnings, Nevada employers cannot use that information to determine whether to hire someone or what their pay rate will be, Mannelly notes.
Nevada’s new pay transparency and equity law applies to public and private employers, staffing firms, and state, county and local government agencies.
Mannelly says SB 293 may benefit women and minorities more than others because it makes it harder for employers’ salary offers to perpetuate any past inequities a worker may have experienced due to discrimination.
For every dollar that a white male earned in 2015, women and minorities made around 80 cents or less, according to the latest census data.
“Women or minorities have been, historically, paid less,” Mannelly says. “This prohibits an employer from relying on past wages that perhaps were not where they should have been. The purpose is to help ensure equal pay for equal work.”
Shannon Pierce, an employment and labor attorney at Fennemore’s Reno branch, says Nevada employers that do not comply with SB 293 face administrative penalties and fines up to $5,000 for each violation. A jobseeker could also file a private class action and sue.
“This is one of those subjects that goes to the Labor Commissioner,” Pierce notes. “If somebody is asked what they made at their last job, or if they’re denied access to the salary range, they can go to the Nevada State Labor Commissioner and make a claim.
“And if you get a class action, that can be expensive.”
Pierce says she’s had a few clients ask if they can bypass the law by getting rid of salary ranges for positions. While SB 293 does not require an employer to establish a salary range, Pierce advises against removing them.
“Having consistency and knowing what your ranges are helps fight discrimination claims in other contexts,” she says. “So, I don’t recommend that businesses just get away with salary ranges altogether.”
The businesses that will likely be the most impacted by the law change are those in an office setting. Conversely, businesses in the retail and restaurant industries, for example, will not bat an eye at Nevada’s new pay transparency law, Pierce says.
“If you want to know the salary ranges for starting positions at a fast-food chain, you just look in their window. Everybody’s desperate to hire; they’re putting up these crazy numbers for what they’re willing to pay,” she says. “But in office environments, we still keep salaries a little bit behind the veil. There’s some hesitation on the part of some employers to let that information come to light, not because anybody’s trying to be unfair, but because when you know what somebody else makes, it can make you feel a little embittered.
“There are fears that it could lead to bad morale if people know what other people are making.”
So far, Pierce says she has not received calls from clients objecting to pay transparency, but she is getting plenty of questions from employers who want to make sure they are compliant.
Of note, the new law also gives employers “an opportunity” to do an internal audit into its hiring practices and salary offerings.
“Now’s the time to make sure, do we have consistency between men and women between different protected groups, in terms of our pay?” Pierce explains. “Because if we don’t, we might as well fix it before we start having to post what our ranges are. So, I definitely recommend that businesses take a close look and clean house before they have to start dealing with potential lawsuits coming from this.”
States that have implemented similar laws include California, Colorado, Maryland, Washington, Rhode Island and Connecticut.
A year ago, researchers at Boston University found that after states implemented history bans, pay for job switches increased 5% more on average than for comparable job changers not covered by such a ban. The benefits were even greater for Blacks and women, who saw increases that were 13% and 8% higher, respectively, the study found.