Interview Topics: Rethinking Salary Questions
How much are you paid? Employers and HR in Massachusetts can no longer ask applicants this question—and the trend may gain national momentum.
As a recruiter or hiring manager, understanding salary history is an important piece of the employment puzzle. Most applicants dread the question, fearing a low current salary means leaving money on the table while a high figure could price them out of a job.
Through new laws, legislators hope to eliminate compensation bias and create more transparency in the hiring and salary negotiation process.
In August, Massachusetts Governor Charlie Baker signed the Massachusetts Pay Equity Act into law. Scheduled to take effect on July 1, 2018, the Act is intended to reduce the pay gap between men and women, and to ensure candidates are not anchored to low historical wages that may not reflect their true market worth.
Salary questions banned before hire
While other states have laws prohibiting pay discrimination, Massachusetts is the first state to bar employers or recruiters from asking salary questions before an offer is made. Some features of the Massachusetts law include:
- Employers may not ask applicants their current salary, wage, or salary history
- Candidate are free to provide salary information if they choose
- Employers may ask about salary figures after a job offer is extended
- Employers may contact a former employer with questions about salary history after a job offer is made, and the candidate agrees to release the information
- Women and men must be paid equally for “comparable work,” not just for similar job titles
- Employees have the right to discuss pay with co-workers
These legal components make the recruiting and interviewing cycle more complex. By removing wage information at the outset, employers and ATS lose a screening factor, as salary history can no longer be used to exclude, or include, candidates for a position in Massachusetts.
Of more concern to legislators is the tendency of women and minorities to remain locked in lower wage categories due to bias, discrimination, or unwillingness to fight for a raise.
A similar measure has been introduced in Congress. One of the backers of the bill, Eleanor Holmes Norton, notes “Many [employees] carry lower salaries for their entire careers simply because of wages at previous jobs that were set unfairly. Our bill will require employers to offer salaries to prospective employees based on merit, not gender, race, or ethnicity.”
Some companies have already taken steps to address their pay gap. In March of this year, leading CRM provider Salesforce discussed its global audit of 17,000 employees to ensure wage equity.
The company reported approximately six percent of its workforce, women and men, required wage adjustment based on criteria developed by the company. Salesforce spent $3 million to equalize salaries. In addition, Salesforce supports programs that have resulted in a 33 percent increase in promotion of women in their workforce, as well as supporting flexible hour arrangements for new parents returning to work.
For employers looking to improve their hiring profile within talent pools, consider steps like:
- Know the value, in wage and benefits, your company assigns to each job category
- Remove questions about salary history on application materials
- During interviews, do not inquire about current pay or salary history
- Make employment offers based on industry research and fair workplace objectives
- Allow, or at least do not prohibit, salary conversations in the workplace
Opposed by many employers and business groups, suggested bans on salary questions and finer grained equalization of pay for comparable work may or may not gain federal approval.
Even then, similar measures are likely to make headway on the state level as conversations continue about the need to close the pay gap, increase diversity, improve hiring and retention, and create a more transparent, fair workplace.