Some employers ask applicants about how much they made at a prior job in order to establish their compensation for the new position. A number of states have recently adopted legislation that prohibits or limits the ability of employers to use an applicant’s pay history for purposes of setting the future hire’s compensation. These measures are based on the argument that if an applicant was discriminated against at a prior job, using that pay as a basis to set the new job’s compensation perpetuates that discrimination.

On Monday, the Biden administration announced new proposed regulations that would apply this prohibition to federal contractors and subcontractors. The proposal was included in a set of measures intended to commemorate the passage of the Lilly Ledbetter Fair Pay Act 15 years ago. Contractors would be prohibited from either asking about or using pay history when setting employee compensation.

Even employers not subject to these state or federal restrictions may think twice before asking about applicants’ pay history. Given the increasing emphasis on pay discrimination, especially discrimination based on gender, pay history should not be a relevant factor. Companies can set pay ranges for a given position, with variation within those ranges based on criteria such as experience, education, and various skill sets.

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