“How much do you make?” The question that job candidates struggle with … may no longer be asked in many places across the country as states and municipalities are passing laws prohibiting employers from asking prospective employees their salary history.
Last October employers in New York City for the first time could no longer ask job candidates the dreaded question.
Mayor Bill de Blasio signed a bill recently that makes it unlawful for those involved in the hiring process to inquire about what an applicant currently makes — a measure that targets the gender pay gap.
“This is about fixing a broken history. This is about overcoming years and years of discrimination that held people back,” said de Blasio.
In the meantime, businesses that look for talent in one of the country’s largest labor markets will need to reexamine their hiring practices.
This will require employers to change their job applications, employ new practices in terms of hiring, and retool how they engage in the salary discussions with prospective employees, focusing on salary expectations rather than current salary.
Salary Inequity
Advocates behind the new laws believe that because of historical salary inequity between the sexes, demanding a salary history keeps women locked in a cycle of lower pay than men. According to the Institute for Women’s Policy Research, in 2017 the ratio of women’s to men’s median weekly full-time earnings was 81.8 percent.
But, things are not always what they seem! Last year the Harvard Business Review published a study finding that women who were asked and refused to give information about their salary history were offered less than women who did disclose it. Conversely, men received a higher salary when they refused to answer the question than did the candidates who provided salary history.
When Salary Isn’t The Only Thing
Some human resources and recruiting professionals believe that with the need for employees to continually add new competencies to their skill sets, one’s salary history alone is unfair to candidates and their skills. These days there are many job seekers, certainly millennials, who see salary as just one part of the compensation equation. They are willing to sacrifice pay for more flexible schedules, the opportunity to work remotely, an easier commute or other benefits key to job satisfaction.
Of course, job applicants are not prohibited from providing their salary history on their own. Also, in some jurisdictions, employers still are allowed to ask applicants the salary range they expect for the roles and responsibilities of the position there are seeking.
What We Suggest To Clients
- Employers may need to alter their mindset about compensation and negotiation.
- Employers should pay even more attention to the experience, aptitude and skill sets of candidates and assess how relevant they are to the job being filled.
- Clients may want to opt to ask applicants what their salary expectations are early on in the process. The answer can help screen out candidates whose salary demands are too far outside of the range of what they are willing to offer.
- Clients with operations in several states and cities should consider not waiting to alter their hiring policies simply because a certain state or city has not outlawed salary history questions.
Background Articles
“The most recent annual government data show women who work full-time, year-round still earn 80 cents for every dollar men earn, a level that has hardly budged over the past decade after rising from about 60 cents in 1980.”
If you are looking to hire the talent that will be critical to your future success, please contact Robert Pestreich for a complimentary consultation.
Call Harrison, Stone & Associates at 212.687.3030.
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