Q: I recently had an interesting issue come up with a recruiter. A recruiter claimed that there is a new MA state law that requires all employers to verify the current/previous salary of all new hires. He claimed that this is to ensure people get a "fair" salary. I did some research online and found nothing. I have a strong feeling that this is just a negotiation tactic used by some recruiters to probe for low salaries. Does such a law exist?
A: You have good instincts! As of this writing, there is no Massachusetts law which requires employers to verify the current or previous salary of an applicant in order to ensure that the applicant receives a “fair” salary in his or her new position (or for any other reason). However, many prospective employers can lawfully ask applicants to provide their salary histories and may seek to verify that information directly with the applicants’ prior employers, through independent research or hiring a third party to conduct a background check. A background check could include verifying a candidate’s salary history, educational records, credit history or criminal history.
I consulted Jeffrey Dretler, a partner in the Employment Law Group at Prince Lobel Tye LLP. Dretler offers, “When an employer engages a third party to gather this type of information, the inquiry is governed by the federal Fair Credit Reporting Act and requires the employer to obtain the applicant’s advanced written authorization. If the employer contemplates making or does make a decision not to hire the applicant based on information contained in what is referred to as a ‘consumer report,’ the employer must provide the applicant with a copy of the report, notice of his or her rights, and a reasonable opportunity to explain or correct any errors in the report.”
Dealing with a candidate’s compensation can be a challenge. As a candidate, you can choose to not share your salary history with a recruiter. However, if you do respond with false information and the employer later discovers that you intentionally supplied false information, your sharing of false information could constitute grounds for termination of employment.
You have touched upon an issue that has attracted a bit of attention recently, which is the balance between an employer’s interest in screening prospective candidates and the candidates’ right to privacy. For example, some employers are requesting applicants share their passwords or log-in information to social networking websites such as Facebook or LinkedIn in order screen the applicants’ connections or conduct. Dretler warns, “Employers should think twice before adopting such practices. Maryland recently became the first state in the country to make such an inquiry illegal and similar legislation has been proposed in Massachusetts. Even without specific legislation, such a practice could constitute a violation of the candidate’s statutorily protected right to privacy, although no Massachusetts court has yet ruled on the issue.”