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More States Banning Employers from Asking Salary Histories

September 07, 2017

Attention employers, do you ask potential hires about their salary histories? New laws are starting to prohibit this on.

Do you include the unpopular, “What’s your current or most recent salary?” question in your interviews, employers? Well, many states are putting a kybosh on this as it limits employees’ starting pay in some cases, and does not always support equal pay for men and women.

What’s the intent behind the question?

Employers want to set the employee’s starting pay with some kind of knowledge on what he/she has made in the past.
Salary inquiries are typically used by employers to

  1. Gage the current market value of a job
  2. Determine if the expectations of the applicant are affordable by the employer, or to
  3. Adjust compensation to the market value or expectations of the applicant.

The controversy begins when an employee is searching for a higher-paying job, only to be offered a mere 10% increase at best once employers find out about the employee’s past earnings. Also, several states and cities are banning the question because it does not ensure pay equity for women. When women are paid less than men, that pay disparity can follow them from job to job.

Which states have passed laws banning the salary question?

Delaware and Oregon are the latest states to address pay equity by prohibiting this question. Restrictions have also been enacted in Massachusetts, Puerto Rico, New York and Philadelphia.

Massachusetts was the first state to bar employers from asking about applicants’ salaries, with the primary purpose of closing the wage gap between men and women. The state’s new law requires employers to state a compensation figure up front, based on what an applicant’s worth is to the company in the role he/she will be filling, rather than what he/she has made in past positions.

When does the new law go into effect?
The MA law goes into effect July 2018.

Other steps MA is taking to combat pay discrimination

The new law will take other steps to level the playing field when it comes to fair salary.

  • Companies will be prohibited from banning workers from telling others how much they are paid.
  • Companies must allow employees to compare information about how much they’re paid.
  • Though workers with more seniority will still be eligible for a higher salary, the law will require equal pay not just for workers whose jobs are alike, but also for those whose work is of “comparable character” or who work in “comparable operations.”

What should employers do in the meantime?

Many employers will need to update their job application forms if they have them. Furthermore, human resource departments should consider providing interview training to recruiters to make sure they are well-read in the new law.

If you have questions on the law and preparing for it, please contact me or any member of the KLR Executive Search Group.

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