SALARY HISTORY BANS AND THE HIRING PROCESS
Until recently, employers in all states could ask applicants about their current salaries or what they made at previous jobs during the hiring process. With the renewed national focus on gender inequality in pay, several states, cities and governments are passing new laws designed to address gender pay inequality and prohibit employers from requesting salary information from job applicants. However, be mindful that additional laws could be on the horizon. Be cognizant of equal pay laws when negotiating an applicant’s salary.
Even though it has long been illegal for employers to pay different wages to men and women for the same work, a significant pay gap still exists. The Bureau of Labor Statistics reports that women earned 82% of what men earned in 2016 and for minority women, the pay gap is generally even more pronounced. The salary history ban is designed to reduce the gap and hopefully eliminate it all together.
Generally, salary history bans prohibit employers from asking applicants about their current or past salaries and from seeking this information through an agent or from sources other than the applicant, such as the applicant’s former employers. The salary history ban prohibits the following questions or statements:
* The term generally refers to the communication of any question or statement to an applicant
* Question or statement to an applicant’s current or former employer, current or former employee, an agent of the applicant’s current or former employer (in writing or otherwise) for the purpose of obtaining an applicant’s salary history
* Search publicly available records or reports for the purpose of obtaining an applicant’s current or former compensation data
To identify and quickly weed out applicants with unrealistic expectations or whom they can’t afford to hire employers in states with bans can still ask applicants about salary expectations. If the applicant offers their salary information voluntarily without being asked, the employer can consider that information in setting pay.
With 15 states and several localities now having some form of prohibition against salary-history questions, HR professionals and hiring managers must be vigilant in understanding what they can and cannot ask a job candidate.
What Should Employers Do?
If your company is subject to any of these laws, the first thing to do is remove questions on print and online applications that request compensation history. The more difficult challenge will be ensuring you train managers who will no longer be able to ask any questions about previous pay. This will help to protect your company from risk, your human resources team needs to train managers as quickly as possible. Employers will have to ensure that outside recruiters do the same.
If you have salary ranges for your positions and ensure that the variations within those ranges are based on things like merit, education and experience to remain in compliance you should:
* Review recruiting and onboarding policies, practices and procedures to ensure compliance with the specific provisions and prohibitions
* Review existing job applications to ensure those documents do not contain any requests for applicants to disclose their salary histories during the hiring process
* Provide: FAQs to recruiters and other personnel involved in interviewing and onboarding to ensure they are not asking (or otherwise prompting) candidates to disclose salary history
* Train talent acquisition staff to focus on an applicant’s salary requirements and expectations versus salary history, emphasizing the company sets pay commensurate with experience
* Do not refuse to hire an applicant based upon his or her failure to provide salary history
Rothmeyer | Rothmeyer has over 20 years of experience ensuring employers remain compliant with hiring regulations, including salary history bans. Contact our experts for assistance today.