January 28, 2020

Salary History and the New Normal

With the rise of legislation aimed to dismantle the gender pay disparity, US hiring practices and traditional interview structures are facing a new normal in 2020. The Salary-History Ban addresses the predilection of the recruitment process and the assumptions that often accompany previous salary acknowledgments. This regulation prohibits the routinely-asked question of preceding salary and encourages a neutral and nondiscriminatory hiring process.

Not only does this legislation aspire to obliterate the gender pay gap, but it also seeks to eliminate biased logic regarding candidates who may customarily be considered “overpriced” or “unqualified” simply due to their previous wages. Though this ban differs in scope and relevancy depending on location, several states and localities have now enacted this legislation leading to increased momentum for similar laws in varied locations.

While comprehensiveness varies, in many states this law prohibits employers from hiring or refusing to hire, interviewing, or fulfilling positions based on a candidate’s decision to withhold previous salary information. In other locations, this legislation bans employers from inquiring for previous salary entirely and further prohibits a previous pay structure from being considered in setting pay.  Other states allow this discussion only after an offer is extended with the purpose of negotiation. While these laws do not ban candidates from volunteering salary history, this information cannot be used in hiring decisions or salary offers.

With 17 state-wide bans and 20 local bans, these states are acting quickly to increase awareness while others fight to create their own. As of December 2019, these 17 states in which salary-history bans have been implemented include:

  • Alabama
  • California
  • Colorado
  • Connecticut
  • Delaware
  • District of Columbia
  • Georgia
  • Hawaii
  • Illinois
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts,
  • Michigan
  • Mississippi
  • Missouri
  • New Jersey
  • New York
  • North Carolina
  • Ohio
  • Oregon
  • Pennsylvania
  • Puerto Ricco
  • South Carolina
  • Utah
  • Vermont
  • Washington
  • Wisconsin

(For more information on specific legislation within these states, visit https://www.hrdive.com/news/salary-history-ban-states-list/516662/.)

As an increasing number of states implement salary history bans, now is the time to reshape negotiations and acclimate to the new normal. Not only should paperwork and interview processes be adjusted to suit inevitably impending legislation, hiring managers and management personnel should be retrained and processes reevaluated to ensure compliance.

There are a number of ways to remodel strategies to suit the new normal. The most pertinent action is to hire employees based on experience, industry standards, and abilities. To avoid wasted time for both you and your candidate, share a salary range within your posted job descriptions. Additionally, revise your question to address salary expectations rather than history.

Though altering a long-developed process can be a daunting task, the time is now. Regardless of legislation or the lack of, excluding the salary history question can create an environment of trust and personal satisfaction for your new hires along with fighting the gender pay disparity.