Asking for an Applicant’s Previous Salary is About to Be History

The Salary History Question: Is it History?

A change to the hiring process has been developing across America within the last 12 months. Currently, 8 states, 6 cities, 2 New York counties, and Puerto Rico have banned employers from asking for a candidate’s salary history, and bills are up for debate in several more states. What has spurred this development? After all, it is certainly understandable that employers have wanted to know this information in order to make informed hiring decisions and minimize costs. But lawmakers and advocates have argued that this common practice traps certain individuals in a cycle of underpayment, especially women, minorities, and people moving from places with lower costs of living. Even if your law firm is not located in a state affected by the recent flurry of laws banning the salary history question, we suggest you consider revisiting your hiring process and eliminate such questions. Here are a few reasons why:

A Unified Policy

If you do business across state lines, including places that have already banned the salary history question, or are near states that have, it will be easiest to have a single policy in place for all of your offices. These laws are quickly being debated and added by more and more states and cities (see complete list at the end of this article), so simply adhering to the stricter laws will help ensure that all of your offices are in compliance, and you will save yourself the headache of having to adjust your policies multiple times. After all, complying with these laws does not simply mean that you can no longer ask for a candidate’s salary history. Violations do carry repercussions, so you will need to train your HR staff and recruiters on what kinds of questions are appropriate and legal for compensation discussions. This approach has already been followed by Google, Facebook, Cisco, Bank of America, and Wells Fargo.

A More Accurate Valuation

Asking for someone’s salary history may cause you to undervalue certain candidates due to conditions that have nothing to do with their abilities. As a result, you might lose out on qualified candidates who receive a more competitive offer elsewhere. The goal of these laws is to narrow the pay gaps for women and minorities—if they were underpaid in the past, revealing their salary history puts them at risk for getting underpaid again. Even if their new job actually increases their pay, it will likely still lag behind the standard due to starting from a lower point to begin with. By avoiding the salary history question, law firms can instead focus on paying a candidate a wage determined by their skills and the requirements of the job.

What To Do Instead

Perhaps you’re considering abandoning the salary history question, but are still looking for a way to determine an appropriate salary for a candidate. One option is to simply set a range for the position beforehand and be upfront with the candidate about it. Your scale can account for experience, education, and performance, in order to pay what’s fair. Most of the laws being passed do allow you to discuss salary expectations, which can serve a similar purpose to the salary history question, but leaves the candidate feeling more respected and fairly treated. These strategies will improve your relationship with the candidate and encourage a smooth hiring process.

There are many benefits to complying with the new standards created by these laws, including increased clarity and efficiency for your team during the hiring process, a widened candidate pool, and better candidate relations. In addition, it could help you increase diversity at your law firm, which in turn can improve the bottom line. By adhering to these laws—even if they don’t apply in your state—you make your firm more appealing by empowering your HR department to pay appropriate wages for the position, regardless of an individual’s past pay.

If you’re not sure how to determine fair pay, we’d love to use our knowledge of the legal hiring market to help you out:

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Current statewide bans (date of effect): California (1/1/18), Connecticut (1/1/19), Delaware (12/14/17), Hawaii (1/1/19), Massachusetts (7/1/18), NJ (2/1/18 [public only; but senate passed bill this year for all employers]), Oregon (10/6/17), Vermont (7/1/18), Puerto Rico (3/1/17)

In process:  Florida, New Hampshire, New York, and Rhode Island

Current citywide or county bans (date of effect): Albany County, NY (12/17/17), New York City, NY(10/31/17), Philadelphia, PA (on hold), Westchester County, NY (07/09/18)

Note: additional cities have bans for city offices only.

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