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Talent Talk: Salary History Bans, What Employers and Employees Need to KnowTalent Talk: Salary History Bans, What Employers and Employees Need to Know
In 2017, state and local governments first began to enact laws that prohibit employers from requesting salary history information from job applicants. What does this mean for companies who are hiring and candidates who are interviewing?
May 3, 2021
With Mother’s Day just around the corner, this column is dedicated to all the working moms in the plastics industry.
In 2017, state and local governments first began to enact laws that prohibit employers from requesting salary history information from job applicants. The laws are aimed at helping end historical pay disparities, especially among women and minorities. The theory is, if compensation is always based on historical numbers, any existing pay gaps will be systematically perpetuated.
Since the laws are state by state, and in some cases at the city or county level, the specifics vary. Some go farther and prohibit an employer from relying on pay history even if it is voluntarily disclosed. Currently at least 19 states have adopted some form of ban, and there are more than 20 local bans. On April 15, the US House of Representatives passed the Paycheck Fairness Act (H.R. 7), which would be the first national legislation in quite some time to address this, although its future in the Senate is uncertain.
What does this mean for companies who are hiring and candidates who are interviewing? This is a very new and evolving area of the law without much precedent, but here is what we can recommend at this point.
If you are an employer, be aware if any laws are applicable to you. If there are, more companies are including a salary range with job postings or asking what an applicant would be hoping to earn should he or she get the position.
If you are a candidate for a position, you should also be aware if any laws have jurisdiction where you are applying or interviewing. There are no laws prohibiting you from disclosing your current compensation or expectations, so you should gauge whether it may be in your best interest to do so.
A gray area emerges within the salary history ban landscape when you consider that we are in the tightest labor market possibly in the nation’s history. Increasingly, jobs are not filled through the traditional approach of a job posting followed by many qualified applicants. How do we comply with the laws when recruiting passive, employed candidates?
As I mentioned, this is a very recent and developing scenario that will require understanding and cooperation from all parties for a win-win outcome. While recognizing that we must end discriminatory pay inequalities, we also do not want to create situations where an entire interview process plays out but, in the end, the company makes an offer that the candidate is unable to accept because it would represent a step backward in compensation. That is not the intention of these laws, but one must also be mindful of the law of unintended consequences.
About the author
Paul Sturgeon is CEO of KLA Industries, a national search firm specializing in plastics, packaging, and polymer technology. If you have a topic you would like to see discussed, a company that is growing, or other ideas for this blog, e-mail Sturgeon at [email protected].
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