The most dreaded question in a job interview, “What is your current salary?” is now off limits in 4 states, 3 large cities and 1 U.S. Territory. California, Delaware, Massachusetts, Oregon, Puerto Rico and New York City, Albany and Philadelphia have legislation that bars employers from asking about a job applicant’s salary history. The National Conference of State Legislatures says 22 other states are considering similar measures.
These initiatives target the gender pay gap. Women earned 79.6 cents for every dollar men made in 2015 according to data released by the Census Bureau. Advocates of this legislation say questions about salary history reinforce unfair wages. If you are already behind your market rate getting an increase on that lower-than-appropriate base means you never catch up. The pay gap for woman makes them particularly vulnerable.
The Chamber of Commerce for Greater Philadelphia has challenged that city’s new salary history law in federal court. As a result Philadelphia’s law that was to go in effect on 5/31/17 has been stayed. As you can see from the spreadsheet all the other states and cities law goes into effect in 2017 or by mid-2018.
What does this mean for your company?
If your company is in one of the principalities that has the new salary history law, you should start removing questions about salary history from your applications and begin retraining all employees who take part in the hiring process on how to address the salary question. Pay grading on your open positions will be even more important than it was before because that range will determine the offer. If you have multiple locations, you will need to determine whether your internal policy on salary history is the same across the board or different in different locations.
Questions on compensation should focus on what salary the candidate is seeking. In turn a company, “Upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.” This is terminology from the California statute. Clearly the onus has gone from the candidate sharing information they often don’t want to, to the company revealing their pay ranges.
What does this mean for you as a job seeker?
Interestingly you can still voluntarily disclose your salary history. Again from the California statute, “If an applicant voluntarily and without prompting discloses salary history information to a prospective employer, nothing in this section shall prohibit that employer from considering or relying on that voluntarily disclosed salary history information in determining the salary for that applicant.” The voluntary disclosure must be made “without prompting” of any kind from the employer.
You will have to decide whether providing salary history is going to help your application or hurt it. Finding out the pay range for the position before you provide your history is critical to the decision whether to share it or not. If you make more than the range, you might have to reconsider applying or reconsider your salary expectations if the job is that appealing. General opinion is that these laws will make salary negotiation limited to the pay range. It is possible compensation outside of base salary will become more important.
Some of the states and cities are allowed to get salary history from you after an offer has been made and accepted, so be prepared to defend your current compensation whether you share it early in the process or not.
New Federal Law?
While the list of states and cities currently with this new law is short, the expectation is that many states will follow suit. There is even a Paycheck Fairness Act being introduced in Congress that would strengthen provisions in the Equal Pay Act of 1963. This Act, if passed, bans employers from asking about a job candidate’s pay history during the interview process, and this would cover EVERY state and municipality.
Recruiting firms are subject to the same laws. Interested in talking about how this could impact your job search? Contact the recruiters at Smith Hanley Associates.