Maine Employers Must Cease Seeking Compensation History

On April 12, 2019, Governor Mills signed into law LD 278, “An Act Regarding Pay Equality.” Under the new laws (5 M.R.S.A. § 4577; 26 M.R.S.A. § 628-A) employers may not “use or inquire about the compensation history of a prospective employee from the prospective employee or a current or former employer of the prospective employee unless an offer of employment that includes all terms of compensation has been negotiated and made to the prospective employee, after which the employer may inquire about or confirm the prospective employee’s compensation history.” Each violation of the statute will amount to a fine of between $100 and $500 and the affected employee/applicant can file a civil action seeking compensatory damages. There are exceptions to the statute, allowing employers to seek information after all the terms of compensation have been negotiated, if state or federal law requires disclosure, or if the “employee or prospective employee has voluntarily disclosed compensation history information, without prompting by the employer or employment agency, the employer or employment agency may seek to confirm or permit a prospective employee to confirm such information prior to an offer of employment.”

As a result, if your application still includes requests for pay data from prior employees, you need to update your documents immediately. Additionally, employers should make sure that they update any managers who are part of the interview process to make sure they are aware that questions concerning past rates of pay are now off-limits during the interview process.

If you have further questions on the new bill or best practices as to hiring, contact a member of Verrill Dana’s Labor and Employment Practice Group.