Salary History Bans – How to Handle Them - American Society of Employers - Anonym

Salary History Bans – How to Handle Them

As an experienced recruiter, I have talked to thousands of candidates throughout the years.  Candidates from all levels within numerous industries from manufacturing and healthcare to finance, IT, and engineering.  No matter the level of the positions that I have supported, it has always been considered the norm to request a candidate’s salary history.  However, in recent months recruiters are being cautioned on this approach.

Several states have passed laws that prohibit recruiters/hiring managers from asking applicants about their salary history.  California, Massachusetts, Oregon, New York City, and Philadelphia have passed the law and several states are positioned to establish similar bans.  With so many states joining suit, it is likely to become more widespread and could include the state of Michigan or local cities. 

Why has this become a topic of major discussion?

Lawmakers believe that asking the question of salary perpetuates the matter of wage inequality among men and women.  The bans that have and will soon be passed are put into place to combat, and at some point eliminate, wage disparities. 

Having a conversation about salary expectations and wage history has always been approached as a necessary evil for hiring managers as well as for applicants.  However, prior to the rise in wage inequality discussions and ban implementation, candidates were not given much of a choice.  When presented the question, job prospects did not want to over shoot the mark nor did they want to undercut themselves.  But either way, they had to answer the question or risk disqualification in some cases.  Today, candidates have been advised by industry professionals and lawmakers to simply say no.  Monster.com Contributor, Lee Miller, advises candidates who have been confronted with the dreaded question of salary history to delay discussions, or keep their response vague until the employer wants to hire.  Hiring managers are forced to rely on market value rather than current salary when they are not privy to current or past salary information. 

On the other hand, hiring managers may not be prepared to handle the sudden push back from candidates, and they do not fully understand the impact this could have on their organization.  Many companies have not taken action toward changing their approach to salary inquiries. According to USnews.com, some business advocates say the bans hurt companies that use salary histories to help them set wages. Hiring is costly for organizations, and limiting the ability to determine pay based on prior salary in order to not waste both the hiring manager and candidate’s time may make the process even more costly. But, Tina Hamilton, PHR, president of myHR Partner, says the real issue is gender equality in setting pay within entire industries.  Hamilton also notes that avoiding discrimination in all its forms is in a company’s best interest, and that examining hiring practices periodically to address issues is important.

Hamilton suggests companies consider the following:

  • Training to bring your hiring managers up to speed on regulatory compliance and best practices
  • Conducting an HR audit that includes your organization’s pay and hiring practices
  • Having pay practices in place that are clear to everyone, with structured salary levels, and make them realistic so that managers can stick to them
  • Making pay criteria objective and measurable, so that starting salaries, awards, and raises are part of a fair formula
  • Documenting clearly what factors are used to determine salary, promotions, bonuses, etc.
  • Making sure your documents are user-friendly and archived properly

It is good practice to avoid the salary discussion.  Set clear salary perimeters for all positions and stick to them based on candidate skills only. If salary questions are inevitable, stick with ranges verses specific dollar amounts.     

 

Sources: HRpartnerinc.com; USnews.com; Forbes.com; laboremploymentlawnavigator.com

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