It’s Illegal to Inquire About a Job Applicant’s Salary History

That’s right another joins in…the New York City Council has enacted legislation (effective in 180 days) prohibiting employers from inquiring about a job applicant’s “salary history.”  They are not the only ones. There are several cities and states thinking about passing similar laws – some already have. For example, Philadelphia passed such a law at the beginning of this year and it is in effect in May; and the state of Massachusetts passed an act that prohibits salary history questions (signed August 1, 2016), but it won’t go into affect until 2018.

The law in New York City prohibits asking about salary history (from candidates or prior employers) or even current salary or in any way search public records to find out salary history. Basically, “the people” do not want us relying on salary histories in negotiating terms of employment anymore.

I think this is a good thing. Too many times I have seen candidates get shafted because they were currently underpaid…and so the idea was to offer a lateral move or a very small increase. Even though the people involved in the hiring decision knew that the market rate was much higher for the skill set.

For years now, when I have been asked by hiring managers – “what is their current salary”…I have declined to immediately answer and reply – “could you first please tell me what you think the person is worth?” So many times, the hiring manager would tell me a programmer was worth 110K and that would make him comparable to his peers internally (based on skill set)…only to learn the candidate’s current salary is 90K and so the hiring manager wants to offer 95K.

I was just told by the hiring manager that the person is worth 110K, so why make an offer at 95K? Is it just me that sees this is undervaluing candidates and they will be more likely to leave because they (likely) already know they are being underpaid for the skill sets?

Also, women are found to be paid about 85 percent of what men make (it varies depending on study, but usually something in the 80s is quoted). This is known as the gender wage gap. If she is already underpaid, how is she supposed to catch up if we keep basing offers on her current salary? These laws could potentially narrow the gender wage gap.

Eventually, we may not be able to ask about salary history (current or prior) anywhere in the U.S., but that does not stop us from asking candidates what salary range they expect. Expectations and preferences are kind of wish-washy, because that doesn’t really tell you how little they would work for. I know that kind of sounds bad, but what I really mean is that often when you ask about expected salary or preferred salary…they would have gone lower if they had known the job paid doesn’t pay that much. People just don’t want to undercut themselves. At the same time, they want to be considered for the job. So if they knew it was just a 5K difference, often that would have been acceptable…but they preferred more. And that is the problem with asking for “preferred salary.”

As we still do not list our salary ranges on the positions we post…something I wish we would do and has many advantages…I think the best question to ask is, “for this position, please indicate the minimum base salary that you would require in order to consider this opportunity further.”

I think this would sit better with auditors of our employment practices if we reject an applicant because their minimum they specified was beyond what we planned on paying…versus the candidate was rejected because their preferred or expected salary was beyond what we wanted to pay. Expectations and preferences can change with additional information (like knowing what the position actually pays)…but the minimum needed to consider this position further is pretty clear.

We should always be paying candidates what we think they are worth. Of course, we have budgets for positions (what we can pay) and there are internal equity issues…but if we think someone is worth 110K (and that is within budget, comparable internally, etc.) then we should be offering 110K. Someone’s current pay really should not matter. The laws of cities and states are starting to share that opinion.

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Eric Putkonen is a public speaker / presenter and he is passionate about recruiting / talent acquisition & retention, culture & employment brand, engagement, and leadership (which affects all of the prior).