Employment Laws To Be Aware Of When Hiring Candidates In The US
This blog was last updated in August 2022 and thus discusses the legislation in effect at this time.
US employment law can be a complex topic, particularly if you’re more familiar with doing business in other countries. Before you even hire your first employee, you must consider how your hiring process may be affected by employment legislation and the rights of individuals as job applicants.
The hiring process in the US has experienced many legal changes over the last five years. New local laws have been enacted across the US to help prevent discrimination during the job application process. For example, salary transparency enforcement is becoming more and more common in key US hubs with New York City, one of the most high-profile areas, to recently introduce a salary transparency law.
US employment law is ever evolving. In this article, we’ve highlighted some key legislation to be aware of during the hiring process, including examples of the forms of questions that should be avoided when hiring US applicants.
US Federal Laws
There are a number of federal laws in place to prevent discrimination in the hiring process. These include the Americans with Disabilities Act (ADA), Age Discrimination in Employment Act, Pregnancy Discrimination Act, and Title VII of the Civil Rights Act.
These laws promote equal workplace opportunities for employees and job applicants.
What you should avoid asking applicants
Prospective employers should refrain from asking questions in which the answer can be used against the applicant in a discriminatory manner.
For example, if you want to inquire as to whether a candidate is legally eligible to be employed in the US or if they require immigration sponsorship, it's better practice to ask, "Are you legally eligible for employment in the US?", or "Do you require immigration sponsorship to work in the US?" in comparison to asking a candidate, "What is your nationality?", as this can be construed as discriminatory without context.
Let’s say the role you’re hiring for allows for flexible scheduling and you want the candidate to be aware of this flexibility.
Simply asking, "Are there specific times that you can or cannot work?" will sufficiently get the point across. However, asking a question like, "What religion are you?" based on an assumption from the appearance or sound of the candidate can be construed as discrimination based on religion.
If you want to ensure that the candidate is capable of successfully executing the duties of the job you’re interviewing for, do not make assumptions that the candidate can or cannot perform certain responsibilities based on apparent or concealed disabilities. Instead ask, "Can you tell us about your experience in previous roles performing the duties of the job you’re applying for?”
A guiding principle to consider when asking questions is whether a job-related necessity can be demonstrated for asking the question.
Federal laws that prohibit job discrimination are generally enforced by the Equal Employment Opportunity Commission (EEOC). The EEOC looks with “extreme disfavor” on hiring questions about age, colour, national origin, race, religion, or gender. Furthermore, employers and recruiters should be sure to consider any state or local discrimination laws in the area they are hiring, including salary transparency and ban-the-box laws.
US Salary Transparency Laws
What is salary transparency?
Salary transparency and disclosure laws seek to deter discrimination in compensation. These state and local laws vary, from the prevention of policies that bar employees from disclosing their wages or inquiring about other employees’ wages, to obligating employers to provide a wage or salary range for a position to an applicant or current employee.
The requirement to provide a wage or salary range to applicants can range from making the employer provide the salary range when asked by the applicant, to requiring the salary range in the job advertisement.
Salary transparency laws have garnered more attention in 2022, with the New York City Council enacting a law requiring employers with four or more employees to include a good faith salary range for every job they advertise. The law is anticipated to come into effect November 1, 2022.
Pay data disclosures are now more commonly expected in a tighter labour market. Companies, like Microsoft, are reacting to this trend and are making the decision to disclose salary ranges to all US job postings.
What states have wage transparency laws?
* Legislation is only in place in certain areas of the state
The following states and localities have, or are set to have, a salary transparency law. Each law varies in its requirements and covered employers.
New Jersey (Applicable in Jersey City)
New York (Applicable in New York City, effective as of November 1st 2022)
Rhode Island (Effective as of January 1st 2023)
Ohio (Applicable in Cincinnati and Toledo)
Washington (Effective as of January 1st 2023)
The number of states to implement a salary transparency law may grow in the future, as similar bills are under consideration in states like Massachusetts and South Carolina.
Salary History Laws
What is it?
An increasing number of states and localities are implementing laws that prevent employers from asking applicants for information about their salary history. The objective of these laws is to prevent employers from setting pay scales discriminately.
Though salary history laws vary by state and locality, a general trend has been to prohibit employers from using salary history-related information to screen job applicants or unfairly determine wages. Salary history ban laws may also include questions around commissions and benefits, depending on the applicable law. Due to the concept of joint employment, the same standard is likely to apply to recruiters acting on behalf of employers
California became the first state to prevent employers from asking applicants about their salary history. Many states have followed suit, but as you can expect in the US employment landscape, each state differs in terms of what employers can ask.
To counteract the differing state requirements, some companies, like Amazon, have made it their policy to stop asking this question across their entire operations regardless of whether it is state-enforced.
What states have salary history bans?
Private employers are affected in the following states and localities:
Missouri (Applicable in Kansas City)
Ohio (Applicable in Cincinnati and Toledo)
Pennsylvania (Applicable in Philadelphia)
Rhode Island (Effective as of January 1st 2023)
‘Ban-the-Box’ Laws
What does ‘ban-the-box’ mean?
Ban-the-box laws prevent employers from asking about the criminal history of candidates on a job application, or prior to a specified point in the hiring process, usually with exemptions for positions relating to security or working with vulnerable individuals.
What states have ‘ban-the-box’ laws?
Although no federal legislation on ban-the-box exists, there are a number of states and localities that have ban-the-box laws in place. Each state and locality varies significantly in its ban-the-box prohibition for employers.
States and cities that have implemented legislation can be seen on the map below:
Want Help Understanding the US Employment Landscape?
At PGC we know employing workers and doing business in the US can differ greatly from your own market. After all, we’ve been helping businesses successfully expand into North America for 20 years.
If you’re thinking about hiring workers in the US but have no idea where to start, did you know we can help you compliantly payroll your employees in any state without you having a local entity? Find out how you can get started today with a free US strategy session.
Disclaimer: The information provided here does not, and is not intended to, constitute legal advice. Instead, the information and content available are for general informational purposes only.