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It’s the no-win question that nobody wants to be asked in a job interview—“how much were you making in your previous position?” Good news! You may never hear that question again. An increasing amount of states and localities are making it illegal to ask questions about your previous salary.
Anybody who has interviewed for a job knows the problem with that question. Although it’s best practice to answer truthfully, most interviewees would probably admit that they embellish a little but if you answer too high, you risk pricing yourself too high for the job. If you answer too low, it becomes difficult to negotiate a salary much higher than your low-ball answer.
Along with Massachusetts and New York City, Philadelphia passed a law that bans employers from inquiring about salary. Illinois, Maine, Maryland, New Jersey, New York, Pennsylvania, Rhode Island and Vermont are all considering laws that don’t allow an employer to make hiring decisions based on salary information.
Although an important issue, why would governments take on an issue that revolves around one interview question? Laws like these address the pay gap between men and women, according to experts. With women still making about 80 cents for every dollar earned by men, lawmakers are looking at ways to cut this gap.
Massachusetts took the issue one step further. Governor Charlie Baker signed a law in August 2016 that makes it illegal for interviewers to ask applicants about salary information but also bans employers from telling employees that they can’t talk about their salary with co-workers. When employees talk about salary, disparities that might be based on gender or other discriminating factors come to light and may allow for discrimination challenges to move forward. The law is expected to go into effect July 1, 2018.
According to the National Labor Relations Board, employers cannot ban employees from discussing salary even if there’s no state or local law on books. The Massachusetts law just reinforces what’s already in place.
The Philadelphia law becomes part of the Philadelphia Fair Practices Ordinance that bars employers from asking about salary information, retaliation against candidates if they don’t disclose the information, and using salary information they may have learned from other sources such as references.
But the law faces opposition. The city decided to postpone the law until a lawsuit filed by the Philadelphia Chamber of Commerce is ruled on by the courts. The lawsuit alleges that the ordinance violates free speech and other rights. It also doesn’t address wage discrimination based on gender.
Other laws are suffering a similar fate. California and New Jersey saw similar laws vetoed, a Virginia law died before making it to a vote, and in Washington D.C., the proposed legislation died when the city council adjourned.
What About Public Agencies?
Legislation to ban the question of salary is facing a slow, uphill battle nationwide but public agencies are a different story. New York and New York City state agencies are already not allowed to ask the question. Same is true in New Orleans and Pittsburg, and Congress briefly took on the issue with H.R. 6030, the Pay Equality For All Act of 2016. The bill ended up dying in committee but as more public agencies embrace the change, it’s only a matter of time before private companies have to follow along according to some experts.
What Should You Do?
According to HR professionals, best practice is to post a salary range with the job description. This keeps either side from wasting time and money by going through a multi-step interview process only to find out later that both sides are too far apart on salary. Companies generally don’t disclose salary range because they want to save money but that can backfire when valuable time is wasted interviewing the wrong candidates.
Second, hire based on experience, achievement, and industry standards to create and preserve a positive company culture. With new hires, you want to start the relationship on trust and integrity. If the person you hire feels that they were tricked into a lower salary because you based it on their last job, you’re setting up a culture of distrust.
Further, if employees talk about salary with each other and find large discrepancies among people doing the same or similar jobs, the positive culture of trust breaks down. People that like you will work harder for you. That’s why company culture has become a frequent topic of conversation among company leaders. The couple thousand you saved may be lost in lower productivity and struggling company morale.
Laws that ban asking questions about previous salary will probably pick up momentum in states and localities around the nation but this isn’t something to fear. If you pay based on industry standard, experience, and accomplishments, you don’t need the applicant’s salary history.
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