Employers in Kansas City Must End Salary-History Inquiries by Oct. 31, 2019

Kansas City has joined numerous states and municipalities by amending its human relations ordinance to prohibit employers with six or more employees working in Kansas City, Missouri, from asking applicants (or their current or former employers) to disclose pay history information. The new ban on salary-history inquiries takes effect on Oct. 31, 2019, and carries the risk of fines of up to $500 and up to 180 days of imprisonment for ordinance violations. 

Prohibited Conduct: The ordinance prohibits all of the following conduct relating to an applicant’s pay history:

• communicating any question or statement (verbally or in writing) to an applicant, an applicant’s current or prior employers, or a current or former employee or agent of the applicant’s current or prior employer for the purpose of obtaining an applicant’s salary history;

• screening job applicants based on their current or prior wages, benefits, or other compensation, or salary histories, including requiring that an applicant’s prior wages, benefits, other compensation or salary history satisfy minimum or maximum criteria;

• relying on an applicant’s salary history in hiring decisions or in determining the salary, benefits or other compensation for such applicant;

• refusing to hire or otherwise disfavoring, injuring or retaliating against an applicant for not disclosing his or her salary history; or

• searching publicly available records or reports for the purpose of obtaining an applicant’s salary history.

The term “salary history” is defined broadly to include an applicant’s current or prior wages, benefits or other compensation. However, “salary history” does not include objective measures of an applicant’s productivity, such as revenue, sales or other production reports.

Conduct Still Permitted: While the Kansas City ordinance will no doubt require significant changes in hiring processes for many employers, upon taking effect, the ordinance will permit a number of activities relating to salary history, including the following:

• considering a current employee’s salary history in the context of his or her application for an internal transfer;

• considering salary history information that an applicant disclosed on a “voluntary and unprompted” basis;

• discovering inadvertently an applicant’s salary history information through a background check focused on non-salary history information (however, no such salary history information can be relied upon in negotiations or in hiring decisions);

• informing applicants about a vacant position’s proposed or anticipated salary or salary range; and

• discussing an applicant’s expectations for salary, benefits and other compensation, including but not limited to unvested equity or deferred compensation that an applicant would forfeit or have cancelled by virtue of the applicant’s resignation from his or her current employer (however, employers engaging in such discussions must do so “without inquiring about salary history”).

Employers in Kansas City should audit their hiring and job application documents and procedures in the coming months to be ready for compliance with the new ordinance. Furthermore, employers with operations across the United States should consider whether their hiring practices comply with the patchwork of pay-history laws that have been enacted across the country in recent years.   

Armstrong Teasdale’s Employment and Labor practice, which routinely guides employers in their efforts to comply with the rapidly changing landscape of pay equity and salary history laws, closely monitors the developments in this area of the law and will issue additional alerts as the pay-related obligations of employers continue to evolve.