1. In The Know

Are Salary History Inquiries... History?

  • December 20, 2017
  • Mike Rollins
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This past October, New York City and the state of Oregon joined Pennsylvania as the first jurisdictions in the country to enact a ban on employer inquiries into an individual’s compensation history. This means that at any point in a candidate or employee’s engagement with an organization in these geographies, it is illegal to ask for past salary information, as well as use existing knowledge of salary history to determine compensation.

What’s the goal behind these compensation history laws? It’s been found that if an individual encounters pay discrimination just once, it can follow them throughout their entire career—setting them on a perpetual course of under-earning. These bans are designed to help combat pay inequality, particularly when it comes to the gender pay gap. And it’s a trend that is quickly gaining steam. 

Multiple other states, including Delaware, California, and Massachusetts are set to enact similar bans over the course of the next year.

Making The Shift

What was once a common question used to validate and determine a candidate’s intelligence, success, and overall worth, is now void in key areas across the country. It’s a game changer for countless HR departments and third party recruitment vendors. Rather than relying on historical data to set a benchmark for an individual’s salary, they will now need to find alternate methods. Or face the consequences.

Blurred Boundaries

What may be even more notable, however, is that the reach of these bans extends beyond just the jurisdictions that have enacted them. When you take a look at companies that have multi-state presence, the lines between who can and cannot ask questions regarding salary history begin to blur.

For example, what happens if a candidate discloses their salary history during an interview in a non-affected state, and later, as an employee, requests to be transferred to a location where the ban is in effect?

What if a company based in NYC, for example, relies on an out-of-state third party vendor for recruitment—and this vendor unknowingly asks a candidate for their compensation history? Who’s at fault for the infraction?

We don’t yet know the answers to these questions—only time will reveal the consequences of neglecting to follow these pay history bans. But there is one thing we do know for sure: you don’t want your company to be the first test case.

The Bottom Line

As recruitment professionals, it is our responsibility to stay ahead of the game. While the bans only currently affect select jurisdictions, in the very near future, they will sweep the industry.

Now’s the time to have a discussion. A discussion with HR, a talent solutions provider such as MSH—anyone you can bring together to think through the implications of these new laws. We need to begin to rethink the norms of how we target potential candidates, and how we determine whether or not a person is right for the job. If we don’t proactively mitigate the risk of violating these laws now, the hard-and-fast cost of neglect will catch up to us before we know it.

MSH is an industry-leading talent solutions firm, providing strategic talent acquisition and consulting services to organizations around the world. Established in 2011, MSH aligns people, processes, and technology with overall business objectives.

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