Salary History and Equal Pay: Lessons from the Ninth Circuit

In recent years, the United States Court of Appeals for the Ninth Circuit has played a central role in clarifying how employers may set pay for men and women performing the same or substantially similar work. Its decisions under the federal Equal Pay Act (EPA) sharply limit the use of prior salary and reinforce that only job-related factors can justify pay differences between male and female employees. These rulings have important consequences for hiring practices, pay-setting policies, and efforts to close the gender wage gap.

Understanding the Equal Pay Act Framework

The Equal Pay Act of 1963 requires that men and women receive equal pay for equal work performed under similar conditions. The work need not be identical, but it must be substantially equal in terms of skill, effort, responsibility, and working conditions. Once an employee shows a pay disparity compared to an opposite‑sex colleague doing substantially similar work, the burden shifts to the employer to justify that difference under narrow statutory defenses.

Under the EPA, an employer may lawfully pay different wages to male and female employees only if the difference is based on:

• A seniority system
• A merit system
• A system that measures earnings by the quantity or quality of production
• Any other factor other than sex

The meaning of this last catchall clause—“any other factor other than sex”—has generated substantial litigation. The critical question has been whether an employer can rely on an applicant’s or employee’s salary history as such a factor.

Salary History and the Gender Pay Gap

External data show that women, on average, earn less than men for full‑time work across the United States, even after accounting for education and experience. Because many women begin their careers at lower pay levels, tying new compensation to prior earnings can perpetuate and even magnify existing inequalities. Legal advocates have argued that using salary history risks importing past discrimination into current pay decisions.

This backdrop helps explain why courts and legislatures have taken a closer look at whether salary history is truly a neutral “factor other than sex,” or instead a mechanism that reinforces sex‑based disparities.

The Ninth Circuit’s Pivotal Rizo Litigation

The Ninth Circuit’s analysis of salary history came to the forefront in a series of decisions arising from a dispute over pay in a public employer. In that litigation, a female employee challenged a pay policy that set starting salaries based in part on prior earnings, arguing that it violated the EPA because it produced lower pay for women than for comparable men.

An earlier Ninth Circuit panel had suggested that prior salary might sometimes qualify as a “factor other than sex” if used reasonably to advance a business policy. However, the court later reconsidered the issue en banc

In its en banc ruling, the Ninth Circuit held that prior salary, whether alone or combined with other considerations, is not a job‑related factor and therefore cannot justify a wage differential between men and women under the EPA. The court emphasized that salary history reflects pay for a different job, often under different circumstances, and lacks a sufficiently direct connection to the skills, qualifications, or performance required in the current role.

Key Legal Principles from the En Banc Decision

• Job-relatedness is essential: The Ninth Circuit interpreted “any other factor other than sex” to cover only legitimate, job‑related factors, such as experience, educational background, ability, or prior job performance.
• Salary history is not job-related: Because prior pay generally reflects conditions in a different position, it does not accurately measure work experience, ability, performance, or other employment‑related qualities relevant to the current job.
• Perpetuation of inequality matters: The court acknowledged that basing current pay on past compensation risks perpetuating sex‑based wage gaps, especially in light of evidence that women have historically earned less than men.
• No intent requirement: Under the EPA, an employee does not need to prove discriminatory intent. Once unequal pay is shown, the employer must establish that one of the statutory defenses applies.

This decision aligned the Ninth Circuit with several other federal appellate courts that had already rejected reliance on prior salary as an independent justification for pay disparities between male and female employees.

Confirmation of the Rule and Supreme Court Context

The legal status of the Ninth Circuit’s en banc interpretation was later reinforced when the court revisited the issue and issued another decision affirming that salary history may not be used to justify unequal pay under the EPA. That opinion stressed that the “factor other than sex” defense must be limited to job‑related considerations and cannot include generalized business policies that indirectly reflect sex‑based disparities.

In 2020, the U.S. Supreme Court declined to review this approach, meaning that the Ninth Circuit’s interpretation remains controlling within its jurisdiction. As a result, employers operating in states under the Ninth Circuit’s authority must treat prior salary as legally inadequate to support pay differences between male and female workers in equal pay cases.

How Other Circuits and State Laws Approach Salary History

The Ninth Circuit’s reasoning does not stand alone. Several other federal appellate courts have adopted similar restrictions, holding that prior salary cannot, by itself, sustain an EPA defense and, in some instances, questioning whether it may be considered at all. While nuances exist across jurisdictions, a growing consensus has emerged that salary history is at best a weak justification for wage differentials, and at worst a vehicle for ongoing discrimination.

Beyond the courts, multiple states and municipalities have enacted laws that restrict or ban employers from asking applicants about their past earnings. Recent surveys indicate that numerous jurisdictions have partially or fully prohibited salary history inquiries, reflecting legislative concern about perpetuating pay inequities. These local measures often apply regardless of whether the applicant ultimately brings an EPA claim.

Practical Compliance Guidance for Employers

For employers affected by the Ninth Circuit’s rulings and by emerging state and local laws, revisiting compensation policies is critical. The following steps can help reduce legal risk and promote fair pay practices:

1. Eliminate Reliance on Salary History

• Stop asking candidates about prior compensation in jurisdictions that restrict such questions.
• Avoid using known past pay as a factor in setting starting salary or raises, even if voluntarily disclosed.
• Document alternative factors that justify pay decisions, focusing on job‑related criteria such as experience and credentials.

2. Define Clear, Sex-Neutral Pay Structures

• Establish salary ranges for each position based on market data and organizational pay philosophy.
• Identify objective factors (e.g., years of relevant experience, specialized training, certifications) that can justify a candidate being at the higher or lower end of that range.
• Ensure that those factors are applied consistently to all candidates, regardless of sex.

3. Conduct Regular Pay Equity Audits

• Review employee compensation data by job category to detect patterns of gender‑based pay differences.
• Analyze whether any disparities can be fully explained by valid job‑related factors (seniority, merit, production, or other sex‑neutral considerations).
• Where unexplained gaps exist, adjust salaries proactively and record the corrective rationale.

4. Train Hiring and HR Staff

• Educate recruiters, supervisors, and HR personnel on the EPA, relevant case law, and local salary history bans.
• Provide scripts and guidelines for salary discussions that avoid prohibited questions and emphasize role‑based ranges.
• Highlight that intent is not required for liability under the EPA; inadvertent reliance on non‑job‑related factors can still result in claims.

5. Align Federal and State Compliance Strategies

• Coordinate EPA compliance with broader anti‑discrimination obligations under Title VII and state civil rights statutes.
• Monitor legislative developments regarding salary history bans and equal pay transparency requirements.
• Update employee handbooks, offer letter templates, and performance review processes to reflect current standards.

Illustrative Comparison of Pay Factors

Employee Perspective: Recognizing and Responding to Pay Disparities

Workers who suspect they are being paid less than an opposite‑sex colleague performing substantially similar work can take several steps:

• Gather information about job duties, responsibilities, and working conditions for both positions.
• Document communications related to pay, including offer letters, performance reviews, and any explanations provided for compensation decisions.
• Consult internal policies on salary ranges, merit systems, and pay adjustments.
• Consider legal advice from qualified counsel, particularly in jurisdictions influenced by the Ninth Circuit’s decisions.

Employees should keep in mind that EPA claims focus primarily on the existence of a wage differential and the employer’s justifications, not on proving discriminatory motives. This structure can make the statute a powerful tool for addressing pay inequity.

Frequently Asked Questions (FAQs)

Can an employer ever consider salary history when setting pay?

Within the Ninth Circuit, prior salary cannot be used to justify paying a woman less than a man for substantially similar work under the EPA. Even if an employer is aware of past compensation, it should not rely on that information as a basis for wage differentials between male and female employees. In addition, many state and local laws restrict asking about salary history at all, so employers should examine the rules in the jurisdictions where they operate.

What kinds of factors can legally justify different pay for men and women?

Legitimate factors include seniority, documented merit, production‑based systems, and other job-related considerations such as relevant experience, specialized skills, and education. These factors must be applied consistently, transparently, and without regard to sex. General business policies that are untethered to job requirements—or that indirectly reflect historic discrimination—are unlikely to satisfy the EPA’s defenses.

Do employees have to prove discriminatory intent to win an Equal Pay Act claim?

No. Under the EPA, once a worker shows that she is paid less than a male colleague performing substantially similar work, the burden shifts to the employer to justify the difference under one of the statutory exceptions. Discriminatory intent is not required, which means employers must focus not only on motivations, but also on the objective fairness of their compensation systems.

How do salary history bans interact with federal equal pay law?

Salary history bans are creatures of state and local law and primarily govern what employers may ask applicants during the hiring process. The EPA is a federal statute that addresses pay equality after employment begins. While separate, both regimes aim to prevent the perpetuation of gender‑based wage disparities. Employers should comply with salary history bans to avoid local penalties and, at the same time, structure pay practices so that prior salary is not used to justify unequal wages under the EPA.

What steps can organizations take to demonstrate commitment to pay equity?

Organizations can implement structured pay ranges, perform regular pay audits, adopt transparent promotion and evaluation criteria, and provide training on equal pay obligations. Publicly communicating these efforts, and promptly correcting identified disparities, can both reduce legal risk and build trust with employees.

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Sneha TeteBeauty & Lifestyle Writer

 

Sneha is a relationships and lifestyle writer with a strong foundation in applied linguistics and certified training in relationship coaching. She brings over five years of writing experience to waytolegal,  crafting thoughtful, research-driven content that empowers readers to build healthier relationships, boost emotional well-being, and embrace holistic living.

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