Legislation to ban salary history could reduce pay discrimination in Michigan

A version of this column originally appeared in The Alpena News.

Here in Michigan and across the country, there has been a long-standing, unjust legacy of wage discrimination based on gender and race that has only been exacerbated by employers using an individual’s salary history as a key factor in their hiring and compensation decisions. A new, commonsense bill being considered by the Michigan Legislature could play a much-needed role in helping to narrow existing pay gaps and make workplaces in our state more equitable by enacting a statewide salary history ban.

When looking at wage disparities in Michigan, the picture is bleak at best. Our state has one of the largest gender wage gaps in the country, with the median full-time female worker making just 79 cents for every dollar earned by the median full-time male worker in 2024. And, in that same year, there was an even wider pay gap when looking at both race and gender, with the median full-time Black female worker making just 67 cents for every dollar made by a white male worker.

These pay disparities cannot be easily explained away by factors like where a person lives, their educational background, what kind of work they do or their experience in the workforce. While these factors may account for some of the differences in income, research has time and time again demonstrated that gender plays a big part in how workers are compensated. To put it more plainly, women in the exact same jobs as their male peers are frequently paid less, even if they have the same education and work for the same employer.

Senate Bill 145 offers a glimmer of hope in the face of this stark reality. Last week, I had the opportunity to testify before the Michigan Senate Committee on Labor to communicate the Michigan League for Public Policy’s support for this newly introduced bill, which would ban salary history from being considered by employers in their hiring practices in an effort to reduce pay discrimination across Michigan. 

One of the reasons why this bill is so important is that prior pay is not always an accurate reflection of a person’s present-day qualifications or their ability to be successful in a new role. We only need to look at the COVID-19 pandemic for an example of this playing out. During the stay-at-home orders, many women had to cut back on hours or leave their jobs entirely to care for their children, resulting in lower wages. 

Moving from the public to the private sector can also depress wages when looking at pay history alone. And when an individual’s pay starts off low, it often impacts the full trajectory of that employee’s career with an employer when it comes to compensation and advancement decisions made down the road, from raises to bonuses, promotions or retirement savings opportunities.

It’s also important to note that salary and benefit history as well as credit history bans are not an uncommon thing in our country. Currently, there are 18 states — plus Puerto Rico, the District of Columbia and 24 other municipalities — that have already enacted salary history bans for both the public and private sectors during the hiring process. This includes some of Michigan’s neighboring states, like Illinois and Minnesota. Other states have enacted more limited bans that target just the public sector. For example, salary history bans already exist for state agencies and departments right here in Michigan. 

More importantly, research has shown that these existing bans have worked in reducing pay discrimination. In fact, a 2025 Boston University Law School review found newly hired female workers earned 7.8% more in regions that had implemented salary history bans compared to newly hired female workers in areas without bans. And another study found that non-white new hires in areas with salary history bans saw a 5.9% increase in wages over areas without bans.

And looking beyond the benefits to workers, salary history bans also benefit employers by expanding applicant pools and increasing diversity in workplaces, which can increase productivity and innovation. 

It should go without saying that compensation and employment should be based on the nature of the work and services provided in a job, not by gender or race. SB 145 is an important step in fully recognizing this and reducing wage discrimination here in Michigan. It is our hope that state lawmakers acknowledge the importance of this bill and make a statewide salary history ban a reality for Michigan workers.