Asking job seekers about their past salary a hot topic
This month, New York City joined Philadelphia and Massachusetts in passing legislation that will ban employers from asking job applicants about their salary history, in an attempt to narrow the wage gap between women and men.
More than 20 other cities and states — including San Francisco and California — have similar legislation in the works. The goal is to prevent gender discrimination from being passed from one workplace to the next by basing an employee’s pay on his or her prior salary.
California passed an equal pay law last year, but only after a provision banning employers from inquiring about an applicant’s prior salary was removed. The law says that prior compensation cannot, by itself, justify any pay disparity between men and women.
A bill introduced this year by Assemblywoman Susan Eggman, D-Stockton, would prohibit employers “from seeking salary information” about a job applicant. AB168 also would require employers, upon request, to provide the pay range for a position to an applicant. There are exceptions for government positions and employees if their salary is subject to public disclosure.
San Francisco Supervisor Mark Farrell has proposed an ordinance that would ban employers from asking applicants about their prior salary. It also
would prevent employers from disclosing a current or former employee’s pay without the employee’s permission.
In 2015, women working full time earned 81 percent as much as men, according to the U.S. Bureau of Labor Statistics.
Even after adjusting for factors used to explain the wage gap — such as shorter hours and career interruptions — women still make less than men, according to a study by Francine Blau and Lawrence Kahn published last year by the National Bureau of Economic Research.
Most employers ask about prior salary in applications or interviews. Many online applications cannot even be submitted until a prior salary is entered.
“It’s fair to say a majority of companies use prior salary as some input” in setting pay, said Joelle Emerson, CEO of Paradigm, a San Francisco diversity consulting firm. “In some, it’s a driving factor. In others, it might move it up or down within a range.”
Some job applicants say the mandatory disclosure of prior salary can also discriminate against older workers. If their previous salary is more than the new job pays, they might automatically be disqualified in favor of younger, cheaper employees, even if they are willing to accept less for the new position, which might be less stressful, closer to home or able to offer better health coverage than their prior job.
Lorrene Salazar, 55, said she has applied for about 50 jobs since July and virtually all asked for her prior pay. “I think it inhibits me because they assume I won’t take anything less,” said Salazar, who landed a temporary job with the City of Hayward.
The Boston Chamber of Commerce supported the Massachusetts law that takes effect next year. But many employers oppose the idea. The California Chamber of Commerce opposed last year’s equal pay bill until the provision banning the salary question was dropped. It has not taken a position on Eggman’s bill.
“Sometimes employers say a person’s salary is a measure of their market value right now. It’s an imperfect proxy, because there are a lot of reasons why someone’s current pay does not accurately reflect their experience and qualifications,” said Maya Raghu, director of workplace equality with the National Women’s Law Center. For example, pay for the same type of work might be different in the nonprofit and forprofit sector.
Employer advocates say that if you ban the salary question, “How do I know whether I have a real candidate or not? If I have a job I want to pay $75,000 for, and that person is making $125,000, why should I waste my time?” said Steven Suflas, an employment attorney with Ballard Spahr.
Providing a salary range would allow applicants not to waste their or the employer’s time.
The Western States Trucking Association opposes Eggman’s bill, saying it “effectively eliminates an employer’s ability to negotiate wage, as well as creates a new reason to sue.”
The Association of California Water Agencies said in a letter opposing the bill that it “might not actually close the wage gap for many applicants” because many employers typically start new employees at the bottom of a salary range, unless they can negotiate a higher pay due to skill or previous salary history. Applicants “who do not, or cannot, share their current salary would be limited in their ability to negotiate a salary above the minimum.”
Eggman’s bill would not prevent applicants from sharing their salary history voluntarily. Nor would it prevent employers from asking applicants about their salary expectations.
Under the Massachusetts law, if an applicant voluntarily provides prior salary, the prospective employer may try to verify it, but only after an employment offer with compensation has been made, said Jim Reidy, a New Hampshire lawyer who also practices in Massachusetts.
Companies may tell a prospective employer how much a former employee made, but most don’t for a variety of reasons such as wanting to avoid lawsuits, said Mike Aitken, vice president of government affairs with the Society of Human Resource Management.
Suflas said the priorsalary ban is gaining support, especially in states where people are afraid that the Trump administration might try to “water down workplace protections.”
Raghu said that legislation has been introduced in states that include Texas, Florida, Montana, Virginia and Wisconsin.
“An employer has information about what they want to pay, what their competitors are paying, how much benefits cost,” Raghu said. Applicants can get some of that information through websites such as PayScale, Glassdoor and Salary.com, but “you don’t know how accurate it is. The one piece of leverage most applicants have is their current salary. If they are asked to give it up immediately, even to apply for a job, they have lost any power they have.”
Kris Stadelman, director at Nova Workforce Development, a career services agency in Sunnyvale, dissuades job seekers from sharing their prior compensation. “If they have to, they should talk about a range,” she said.
They should also avoid online job boards that require it. “They are black holes, not many people get actual jobs that way,” she said. Instead, she recommends networking.
“If you see an opening, find out who in your network works there. In that way, you can get your resume pulled out of the stack.”