Michigan Senate Advances Bill to Ban Employers From Asking Job Applicants About Pay and Credit History
LANSING — The Michigan Senate has cleared a procedural hurdle for legislation that would prohibit employers from asking job applicants about their past wages, benefits, or credit history during the hiring process, a move that could help narrow the state's persistent wage disparities.
Senate Bill 145, sponsored by Sen. Sarah Anthony, D-Lansing, advanced in the state Legislature on March 24 and is now eligible for a full vote. The measure would amend the state Payment of Wages and Fringe Benefits Act to bar employers from requesting information about a prospective employee's prior wages, fringe benefits, credit score or credit history during the hiring process.
The bill also enhances current safeguards by forbidding employers from preventing employees from talking about their pay, whether via company policies or employment terms. Exceptions would apply in limited cases where federal law requires employers, such as certain financial industry entities, to consider that information when making hiring decisions.
Supporters See Pay Equity Solution
Advocates say the change would help prevent wage disparities from carrying over from job to job and ensure pay is based on skills and experience rather than past compensation.
"We only need to look at the COVID-19 pandemic for an example of this playing out," said Patrick Schaefer of the Michigan League for Public Policy, which supported the bill. "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."
Schaefer noted that 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.
Addressing Michigan's Wage Gaps
When looking at wage disparities in Michigan, the picture has been bleak for years. The 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.
"Research has time and time again demonstrated that gender plays a big part in how workers are compensated," Schaefer said. "To put it 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."
SB 145 offers a potential solution by breaking the cycle of wage discrimination that can perpetuate across careers.
Other States Have Already Acted
Salary and benefit history as well as credit history bans are not uncommon in the United States. 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.
Research Shows Wage Increases
Research has shown that these existing bans have worked in reducing pay discrimination. 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 non-white new hires in areas with salary history bans saw a 5.9% increase in wages over areas without bans.
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.
Critics Argue Employers Need This Data
Despite the potential benefits, some critics argue that employers rely on salary and credit reports to evaluate candidates and that limiting access to such data might restrict their hiring options.
A legislative analysis found the measure would have minimal fiscal impact, with only minor administrative costs to the Department of Labor and Economic Opportunity.
Next Steps
The bill now awaits a vote by the full Senate before it can move to the House for consideration. The reintroduction of this legislation comes after a similar bill from the 2023-2024 session did not advance to final passage.
The measure represents another development in Michigan's ongoing efforts to address wage equity in the workplace and could serve as a model for other states grappling with similar issues.