Most employers don’t think bans on asking about salary history will work
EIGHT states, cities or localities have recently passed legislation banning all employers from asking one particularly awkward question of prospective workers: How much did you make in your last job?
But according to a new survey by the executive search and consulting firm Korn Ferry, employees well beyond those locations soon might not have to answer the question. Nearly half of the 108 companies surveyed, or 46 per cent, said they would comply with the legal requirements in the most stringent location where they operate, meaning workers well outside of Massachusetts, California or Oregon might no longer be asked about their salary history during job negotiations even if their local jurisdictions do not pass similar laws. Only 32 per cent said they would comply as each region requires, while 11 per cent said their operations were not affected and another 11 per cent said they were unsure.
Tom McMullen, a senior client partner for Korn Ferry, said that while some firms are being advised to maintain separate policies, “that gets messy really quick.” Workplace-related laws that start in local jurisdictions often spread to others, he said, because multistate or national companies decide that having a single policy rather than a patchwork of practices is simpler.
“There will be a tipping point, if it’s not there already, where this will become the de facto way of handling this in this country,” McMullen said. For many companies, having a blanket policy “is easier administratively.” ( The National Women’s Law Centre reports that a few more states are expected to pass similar prohibitions this year. Other jurisdictions have passed measures only for public employees, and a version was introduced in Congress last year. Philadelphia’s measure has faced a legal challenge.)
Yet even if companies are adopting the measures more broadly, they do not seem convinced that they will work as intended. The aim of many of the measures may have been to help close the gender pay gap – the idea being that if employers do not set new wages on the basis of past compensation, one low salary or poorly negotiated job offer early on in her career won’t set a woman back for years to come. But some two-thirds of those surveyed said they thought the measures would not, or would only to a small extent, improve any pay differentials that exist.
The likely reason, McMullen said, is that employers either already feel they have the rigorous pay systems in place to monitor for pay equality, or because the actual gap between male and female employees’ pay at the company – accounting for position, experience, job level and the like – is only in the single digits.
“For those that already have decent processes in place, it probably is a nonevent,” he said, noting that the survey skewed to larger companies. “The biggest difference it’ll make is in those organisations that have a ‘let’s make a deal’ culture” and do not rely as much on market data to set workers’ pay or have less rigorous ways of analysing whether they are paying workers fairly.
The survey also showed that many employers do not seem prepared for the new laws, many of which take effect next year, although some have a grace period before penalties for noncompliance kick in.
Almost a third said they are not prepared for the legislation, while 44 per cent said they had made “some preparations.” Just 5 per cent said it was already their practice not to ask about a candidate’s pay history.