New Maine Legislation: An Act Regarding Pay Equality

The business community is well aware that there are many proposed and pending pieces of legislation that would affect the workplace setting. One of those, An Act Regarding Pay Equality, has already passed. This law, which was signed into law by the Governor on April 12, amends both the general employment laws and the Maine Human Rights Act specific to evidence of unlawful discrimination. 

The amendment to Maine’s general employment law will prohibit an employer from using or inquiring about compensation history of a prospective employee from the prospective employee directly or from a current or former employer of the prospective employee unless an offer of employment has been negotiated and made, including all terms of compensation. After that, the employer is permitted to inquire about or confirm the prospective employee’s compensation history.   

There is an exception to the law, which is that it does not apply to an employer who is inquiring about compensation history pursuant to any federal or state law that specifically requires the disclosure or verification of compensation history for employment purposes. 

The new law also clarifies that an employer may not prevent employees from disclosing another employee’s wages if the purpose is to enforce the rights protected under this section. The existing law had already barred an employer from prohibiting an employee from disclosing their own wages or inquiring about another employee’s wages.

In addition, the portion of the amendment that defines evidence of unlawful discrimination under the MHRA adds another exception, which is that an employer or employment agency may confirm or permit a prospective employee to confirm such information before a job offer if the prospective employee voluntarily discloses it (without prompting by the employer or employment agency).

The monetary penalties for violations of this new law are the same as for other sections of the general employment laws – fines of between $100 and $500 per violation. Likewise, employers may be subject to a civil action brought by or on behalf of an affected employee or Maine’s Department of Labor.  Compensatory damages are available.

The new law is not emergency legislation so it will go into effect on September 17, 2019. In preparation for this legislation, Maine employers should ensure that applications or other hiring materials do not ask what will now be unlawful inquiries about compensation history. In addition, employer representatives who conduct interviews or background checks on prospective employees must be made aware of this limitation as well.