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Navigating the New Bans on Salary Questions

Bans on Salary Questions

A recent Glassdoor study showed that women are still being paid only 76 cents for every dollar that men earn, proving that the gender pay gap is still a problem. And when you account for ethnicity, the gap widens, as Black women earn only 65 cents for every dollar that men earn, and Hispanic women 58 cents. In an effort to level the playing field for all, a number of state and city governments have put laws on the books that make it illegal to ask a candidate about their salary history. So what’s the best way to ease into the touchy conversation about compensation? Honesty.

Instead of asking about current pay, ask how they’d like to be compensated now.

Historically, employers who have asked about salary history have used the candidate’s answer to lowball them — only offering 10 to 15 percent more than what they’re currently making. So if the candidate was underpaid at their previous job, they’ll likely continue to be underpaid at their new gig. This method clearly benefits companies that are looking to get away with paying as little as possible, and doesn’t adequately take into account factors like experience, training, education and location. Furthermore, it perpetuates the gender and racial wage gap.

In reality, a candidate’s previous salary should have nothing to do with what you offer them to do a job at your company. Take a look at the duties of the role you’re hiring for, current market value for that role and your own company’s overall philosophy on compensation. Then, have a conversation with the candidate about what their salary expectations are. Align internally about the tangible experience-related factors that could drive compensation up or down, and proceed accordingly.

Or, you could just lay your cards on the table.

Instead of prodding the candidate for their salary history, you could just tell them what you’re prepared to offer for the role, and see if they’d like to continue the conversation. By being upfront, you gain the candidate’s trust, and set them up to be a loyal and committed contributor to your team. And trust us — building a loyal workforce through fair salary practices is worth any perceived financial “loss” you may take from being candid about pay. You’ll likely more than make up the cost if you’re able to recruit and retain good people versus having to constantly replace employees.

And most important, make sure that everyone in the hiring process knows how to handle the salary question.

For violations of a salary question ban, the legal ramifications vary depending on jurisdiction. But it’s not the kind of headache that any company wants. To make sure that your organization is on top of things, train Human Resources Staff and hiring managers on how to handle the compensation topic during the interview process so that everyone understands what questions are inappropriate, and ingrain your pay philosophy within your team.

Need help navigating salary history bans? Have our team of experts help you get started today!

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