HOW TO HIRE WHEN YOU CAN’T ASK ABOUT PRIOR SALARY

New rules limit what you can ask about a job can­di­date’s prior salary. These tips will help you hire legally and stay com­pet­i­tive

Inc. (USA) - - EDITOR’S LETTER - MIRIAM ROZEN

AT LIFE IS GOOD, the Bos­ton-based ap­parel com­pany, ask­ing can­di­dates about their prior salaries was a cru­cial part of the hir­ing process, es­pe­cially for se­nior po­si­tions. When the com­pany hired a pres­i­dent about a year ago, “we re­lied on can­di­date salary ex­pec­ta­tions to ed­u­cate us about the mar­ket, par­tic­u­larly in­cen­tive struc­tures,” says co-founder Bert Ja­cobs. “The con­ver­sa­tions were in­for­ma­tive and helped us shape our com­pen­sa­tion strat­egy for the role.”

But that source of strate­gic info was threat­ened in Au­gust 2016, when Mas­sachusetts be­came the first state to bar em­ploy­ers from ask­ing job ap­pli­cants about their pre­vi­ous salaries, be­cause bas­ing a new salary on a prior one per­pet­u­ates wage gaps be­tween white men and ev­ery­one else. Since then, Delaware, Ore­gon, Puerto Rico, New York City, Philadel­phia, and San Fran­cisco have ap­proved sim­i­lar laws. “It’s a hid­den form of dis­crim­i­na­tion—em­ploy­ers may think it is rea­son­able to ask and may not un­der­stand the dis­crim­i­na­tory ef­fect,” said D.C. con­gress­woman Eleanor Holmes Nor­ton, who is co-spon­sor­ing a bill to ban the prior-salary ques­tion na­tion­wide. At least three other states are con­sid­er­ing sim­i­lar laws as well.

The Mas­sachusetts law goes into ef­fect in 2018, but Life Is Good has al­ready for­bid­den hir­ing man­agers from ask­ing about salaries. The com­pany now bases start­ing salary of­fers on ex­ter­nal job mar­ket data. Even if your state doesn’t have the re­stric­tion, you may be af­fected if you hire staff in states that do. These founders have learned to make smart salary of­fers while fol­low­ing the rules. —

Il­lus­tra­tion by HANNA BARCZYK

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