Answered by Tom, Hiring Expert at VF Corporation, on Friday, May 4, 2018
Many states and municipalities are now banning employers from asking about salary history and using it to determine your starting point in new role. While there are other reasons, the biggest driver for this is because basing job offers on past salary history continues to perpetuate wage disparities between men and women...women often being paid less for the same job men are doing. There is no one source for all of the locales that ban salary history questions, but you should be able to find out pretty quickly via a search engine...important to know your rights ahead of time. Depending on the specific regulations, employers may still be able to ask about your salary expectations, which gives you a lot more flexibility considering your situation.
Assuming the employer can still ask you about your salary history, the best course of action is to just be upfront about it. Be prepared to tell them your story, I would be more interested in why you took the pay cut vs. that you took one. If it's the right employer, they will not hold it against you and they should be basing your pay on what the job warrants, not what you are making.