Closing the Gender Pay Gap
Professor Jill Hasday plays a critical role in the newly signed Preventing Pay Discrimination Act
Minnesota Law Professor Jill Hasday was instrumental in the passage of a new state law aimed at combatting wage discrimination and narrowing racial and gender pay gaps in the state.
Beginning in January 2024, Minnesota employers can no longer ask job applicants about their pay history under the Preventing Pay Discrimination Act, which Gov. Tim Walz signed into law in May.
“Asking job applicants about their pay history perpetuates pay discrimination,” Hasday testified before the Minnesota Senate Judiciary Committee in March. Hasday’s testimony came at the invitation of Minnesota Human Rights Commissioner Rebecca Lucero ’07.
“The gender pay gap is a persistent and pervasive problem,” Hasday told lawmakers. “The evidence suggests that prohibiting employers from asking applicants about pay history is an important step forward.”
Lucero says she sought out Hasday because of the professor’s expertise in sex discrimination and constitutional law matters. In addition to testifying five times, Hasday wrote letters of support, discussed the act with news media and on social media, and helped Lucero wrestle with specific proposed amendments.
“She is incredibly brilliant at her work,” Lucero says of Hasday. “I’m really proud of the outcome and (Hasday) was absolutely instrumental in moving this forward.”
The Minnesota Department of Human Rights is planning to launch an effort soon to make employees and employers aware of the new law.
History of disparities continues
Significant wage differences continue today despite hopes that the federal Equal Pay Act of 1963 would end them, Hasday told lawmakers. Employers who are sued under the federal act for paying women less often contend that they rely on each applicant’s pay history to determine salaries, Hasday testified. Some federal courts — including the U.S. Court of Appeals for the Eighth Circuit, which covers Minnesota — have accepted that argument.
“This interpretation of federal law has permitted employers in Minnesota to pay a woman less than a man doing the same job, so long as the employer can point to pay history as the basis for the discrimination,” Hasday says. “That will no longer be legal when the Preventing Pay Discrimination Act takes effect on January 1.”
In 2021, the median weekly earnings for women working full time nationally were 83.1% of that of male full-time workers, Hasday testified. Black women earned 63.1% of white men’s earnings and Latinas, 58.4%.
Minnesota’s pay disparities are even worse, according to sources Hasday cited.
“For every dollar a white male worker earns in Minnesota, the average white woman worker earns 81 cents, the average Asian American woman earns 70 cents, the average Black woman and the average Native woman earn 61 cents, and the average Latina earns 55 cents,” she testified.
Wage gaps persist in part because some employers ask job applicants about their pay history before determining what salary to offer, Hasday said. If a woman’s first employer pays her less than men earn for the same work, the wage difference may follow her to subsequent employers.
“Asking about pay history can lock people into a cycle of unequal pay, where they cannot escape being underpaid by getting a new job,” Hasday says.
Minnesota joins some 21 states and numerous local governments that have enacted pay history prohibitions. No border state has taken such action yet.
“It was well past time for Minnesota to get on the bandwagon,” Hasday says.
Pay history bans pay dividends
In states that have adopted pay history bans, the pay of female job changers increased by an average of 8% while the pay of African American job changers increased by an average of 13%, Hasday testified, citing a 2020 study from Boston University School of Law researchers.
Hasday found unconvincing an argument that the act would create a compliance burden for employers. “All the employer has to do is not ask the pay history question,” she says.
Others argued that the act could affect profits. “I can see why some employers might not like this,” Hasday says. “But my response is, if your business model turns on underpaying people, I’m not sympathetic.”
Lucero began working on the Preventing Pay Discrimination Act soon after Walz and Lt. Gov. Peggy Flanagan appointed her to her position in 2019.
“It was at the top of my list of policy changes because the pay gap disproportionately impacts women, women of color, Black women, brown women, Indigenous women,” Lucero says. “To work on a bill that works at this intersectional place is very exciting to me.”
The act serves as a “systems fix,” Lucero says. “I don’t believe that business owners want to pay women less than men. Yet when you look at the data over and over again, that is what is happening.” Therefore, she says, the bill is also a proactive remedy.
“Everywhere that we can be proactive to prevent discrimination from occurring in the first place is better for all of us,” Lucero says.