No More 'What Did You Make?': New Act Bans Employers From Asking About Past Salaries, Sets $5,000 Minimum Fine

This new piece of legislation, simply titled the Salary History Question Prohibition Act, is about to drop a major change into the hiring process. It amends the Fair Labor Standards Act of 1938 to make it flat-out illegal for employers to use your past pay—your "wage history"—when they are deciding whether to hire you or how much to pay you for a new role. Essentially, the bill aims to break the cycle where a low salary at your first job haunts you for the rest of your career. They can’t use what you used to make to set minimum or maximum pay limits for the job you’re applying for now.

Breaking the Cycle of Low Pay

For job seekers, this is a huge deal because it forces companies to pay based on the value of the job and the market, not based on what they can get away with paying you. Think of it this way: if you’re a talented software engineer who spent five years at a non-profit making $70,000, a new tech firm should have to offer you the market rate of $120,000, not try to anchor you down at $80,000 just because they saw your previous pay stub. This provision, found in Section 2, is designed to promote genuine pay equity, particularly for women and minorities who have historically been paid less.

The 'Offer First' Rule and Negotiation

There’s a small but important exception to this ban. An employer can only touch your wage history after they have made you a formal job offer with a specific salary attached. Even then, they can only use that information if you voluntarily bring it up to negotiate a higher wage. For example, if a company offers you $95,000, and you say, “I actually made $100,000 at my last job, so I need $105,000,” they can then use that history to justify the higher offer. The bill is clear: the history can only be used to support you asking for more, not to justify paying you less. They can’t ask your previous employer about your pay until after this offer and negotiation dance has occurred.

Penalties That Pack a Punch

The teeth of this bill are in the penalties. Employers who violate these new rules face serious financial consequences. The civil penalty starts at $5,000 for the very first offense, and subsequent offenses increase by $1,000, maxing out at $10,000. This is a direct cost to the business for non-compliance. But it doesn't stop there. If you were the applicant wronged by this practice, you can sue the employer in federal or state court. If you win, the employer must pay you special damages up to $10,000, plus cover your attorney’s fees. Critically, you can bring this lawsuit on behalf of other applicants treated the same way, setting the stage for potential class action suits that could significantly raise the stakes for companies that ignore the law.

What It Means for the Workplace

For HR departments and recruiters, this means tossing out old hiring scripts and procedures. They need to train staff immediately to stop asking about past compensation, shifting the focus entirely to the skills and experience needed for the role. While this creates a new compliance burden for employers, the upside for employees is huge: it levels the playing field and ensures that your compensation reflects your current market value, not just how well you negotiated a decade ago. The law also includes strong protection against retaliation, meaning an employer can’t fire you or punish you for opposing these unlawful pay history practices.