Throughout 2017, more and more states and municipalities have introduced and enacted legislation barring employers from asking for or only considering a job applicant’s prior salary in formulating a job offer. Following in the footsteps of Massachusetts, Oregon, Delaware, and more, roughly twenty-five states and the District of Columbia are considering their own prior salary measures.
The rationale behind these prohibitions is that existing wage inequities are perpetuated when considering the applicant’s salary history to set starting pay.
Employers across the country now find themselves at a critical juncture and should be weighing their options. So, what are some broad considerations that an organization should be thinking about with an eye toward the future?
A first option is to get ahead of the curve and eliminate all inquiries regarding prior salary altogether. From an administrative standpoint, this would be the easiest option, as the inquiry about prior salary would be removed from all applications and interviewer questionnaires.
A second option is to stay the course and continue asking applicants about prior salary where permitted, while monitoring new legislation as it appears. The larger and more widespread the organization, the more demanding this task will be, especially since the vast majority of new legislation being introduced is at the state and local level. In states and municipalities where prior salary laws exist, be sure that staff is up to speed with state/local requirements. An issue with this approach, however, is how to comply with local regulations when jobs are posted on a company website that is visible to applicants across the country.
A third option is a hybrid approach. For example, if the organization consists of certain departments where salary is fixed across the board and prior salary does not affect the wage being offered, such as Production or Maintenance departments, any inquiry regarding prior salary can be removed. However, where prior salary is more relevant and helpful to recruiters, the company could continue asking about prior salary where needed unless and until the law changes.
With the hybrid approach, HR staff would require additional training when it comes to hiring for certain jobs where prior salary is more relevant in the application process, such as Professionals-Administrative positions. As long as the HR/recruiting staff is knowledgeable about when the question can be asked, they can work within the limits. The issue remains, however, about how to handle job postings visible across multiple jurisdictions.
Whether an organization is considering any or all of these options, there are certain methods to engaging with an applicant about prior salary without specifically asking for it. For example, a recruiter can inform the applicant of the exact pay of the position, or the typical pay range of the job. If the salary range is acceptable with the applicant, the interview process may proceed and the applicant stays within the process. If not, the applicant and recruiter can move on without wasting anymore of either party’s time.
On the other hand, a recruiter may ask an applicant about the specific salary range he/she is looking for in the desired position. If the applicant gives a number outside of the range, the recruiter can inform the applicant that the desired range is outside the scope of the position.
In those jurisdictions where inquiring about prior salary is specifically prohibited, hiring managers, as well as anyone else involved in the interview process, will need to be trained to avoid asking what are now unlawful questions. Even where inquiring is still lawful, thought must now be given as to dealing with applicants who decline to provide prior information, as they are now being advised to do.
Ultimately, if considering options two or three, the organization must be committed to stay on top of the relevant laws; ensure recruiting and hiring personnel are properly trained; and prepare to deal appropriately if and/or when an applicant declines to provide any information.
In any event, with the focus on pay equity, conducting privileged, proactive pay analyses on your workforce on a regular basis (at least once a year) will help ensure that closer parity exists between men and women, as well as minorities and non-minorities.
Please do not hesitate to contact our office if there are any questions as to how these options may pertain to your organization.