As more states legalize cannabis, growth in job opportunities rises. However, with more jobs, the greater the risk of employment related lawsuits at the hiring stage. While there are a host of issues cannabis companies need to consider at the hiring stage (i.e. background checks, policies, benefits, payroll, etc.), this blog post focuses on salary histories.

Salary history bans at the State level. Many states and municipalities have enacted bans that prevent employers from asking applicants about their prior salary information.

For example, California employers cannot ask applicants for prior salary histories and, if the applicant shares this information voluntarily, employers cannot use the information to determine pay. San Francisco goes a step further and adds that employers cannot disclose a current or former employee’s salary without their consent unless it’s publicly available, required by law, or subject to a collective bargaining agreement.

New Jersey, where voters approved a cannabis legalization referendum, prohibits employers from requesting prior wages, salaries, or benefits. But employers can confirm pay history and consider pay history in determining the applicant’s salary, benefits, and other compensation if such history is voluntarily disclosed.

Oregon, which recently decriminalized drugs, prohibits employers from asking prospective employees about their compensation history until after an offer is made. Employers are also prohibited from paying employees who perform comparable work different pay rates because of their race, color, religion, sex, sexual orientation, national origin, marital status, veteran status, disability, or age.

Other states with similar salary bans (where cannabis has been legalized in some form) include: Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Michigan, Missouri, Vermont, and Washington.

The Federal government could soon invoke a salary history ban. President-elect Joe Biden has pledged to sign the Paycheck Fairness Act (Sec. 10) during his term, which, among other things, would create a federal ban on requesting a job applicant’s prior salary history.

Specifically, the Act would make it illegal for employers to use wage history to decide whether to hire a prospective employee. It would also prohibit employers from relying on or seeking prospective employees’ pay histories to determine their wages, and prevent employers from taking any adverse action against any employee or prospective employee for refusing to provide salary histories. There is one exception though: “an employer may rely on wage history if it is voluntarily provided by a prospective employee, after the employer makes an offer of employment with an offer of compensation to the prospective employee, to support a wage higher than the wage offered by the employer.”

Employers who violate the Act may be subject to civil penalties and individual and collective/class actions.