Governor signs Alabama’s equal pay/salary legislation

On June 10, 2019, Governor Kay Ivey signed into law the Clarke-Figures Equal Pay Act (HB 225), which becomes effective on September 1, 2019.

The Act prohibits race or sex discrimination in pay, if the work “requires equal skill, effort, education, experience and responsibility, and performance under similar working conditions,” unless the difference in pay is due to “a seniority system, a merit system, quantity or quality of production or a differential based on any factor other than sex or race.”

This prohibition substantially overlaps with the federal Equal Pay Act of 1963 and Title VII of the 1964 Civil Rights Act.

Of greater concern to us is the language that addresses inquiries regarding an applicant’s compensation history. Specifically, the Act creates a cause of action for retaliation if an individual chooses not to disclose salary history and believes that he or she suffered an adverse action due to that nondisclosure. Specifically, the statute states:

An employer shall not refuse to interview, hire, promote, or employ an applicant for employment, or retaliate against an applicant for employment because the applicant does not provide wage history. Wage history means the wages paid to an applicant for employment by the applicant’s current or former employer.

Therefore, an employer in Alabama may inquire about an applicant’s or employee’s wage history, but may not treat the applicant or employee adversely because the applicant or employee chooses not to disclose wage history. One of the easiest employment claims to bring is retaliation. In essence, an individual claims that he or she exercised a protected right, suffered adverse treatment and therefore the two are connected in the form of retaliation. So, what are the options for Alabama employers?

1. Continue to ask about wage history, with knowledge of the potential implications for a retaliation claim.
2. Discontinue asking about wage history altogether. Rather, ask an individual her or his compensation expectations as opposed to wage history.
3. Continue as is, with a disclaimer noted next to the wage history question on an application or if discussed during an interview, that failure to respond will not result in adverse treatment.

Often, more individuals apply for a particular job than are selected. So, imagine a situation where an individual is not selected, did not answer the question on the application about wage history, and then claims that he or she was denied employment because of that. Our recommendation is for employers to refrain from asking the question on the application or during an interview; rather phrase questions in terms of pay expectations rather than wage history.

Please let us know if you have further questions.