Massachusetts, New York City and California have been among the first to enact laws that forbid employers from asking applicants their salary histories. Like any law, this only works if we as employers embrace the full spirit of the law, rather than just the letter. Embracing this change will be a test of our resolve and commitment to do right by employees to offer pay equity. We employers are so used to asking for and receiving information about a candidate's salary history, so naturally some will struggle to understand why it is important to not ask — and more will struggle to fully make the adjustment in their recruiting practice, because it is simply easier and in some ways more efficient to know the applicant’s salary up front.
Why Embracing This Law Is Important
It is well-established that women and minorities struggle for parity in pay. When employers require salary information upfront, the recruiter or hiring manager will make some interpretation about the number. If the number is high, the candidate must be competent and if the number is low, then the competence level must be reflected in that, many will reason. It would be rare for the agents of the employer to think the lower number is a reflection of a lack of parity. The problem is that when the amount a person was paid in a previous job is not level to their male or white counterparts, it is a distorted measure of their skills and contributions.
Why Technology Makes Employers Vulnerable
Technology may provide us with information we can’t ask candidates directly for, but we must resist the temptation to use it. Employers can find their way around these laws if they so choose. There are vendors that provide all kinds of candidate data, including salary history. This is different than asking for it, or is it? Technically, yes — you have not asked and so if you get the information this way, you may not have broken the law. And yet, you have not honored its intention.
The laws are enacted to inspire efforts toward pay parity for all. We can only achieve it if we actually embrace the push and hold fast to the intention regardless of opportunities to circumvent the law. This can be a character test for every organizational leader who is required to abide by the law and a statement of character for those not required to do so.
What We Need To Do
The law is asking us to recruit in a new way — a more fair way. The law is asking employers to shoulder some of the risk and level the negotiation table by being more transparent in what they are offering in salary instead of requiring the candidate to do all of the upfront sharing. Not only does placing that burden on candidates perpetuate a lack of fairness in pay, but few would consider this practice negotiating in good faith. We have to resist the temptation to use information, regardless of how it is obtained, that tips the scales in the employer's favor.
Leveling the playing field so that women and minorities have a stronger chance to right any salary wrongs is well worth the extra effort we need to make to properly evaluate each person’s candidacy. We have to work to achieve parity. In some regions the law gives us a start, but there is more to do. Our next step should be to completely overhaul the salary discussion from asking what salary is desired to only sharing the salary range and what experiences will dictate where a candidate falls within it.
Before starting the consideration of candidates, the hiring manager should decide how much experience qualifies a candidate for a salary at the beginning of the range, the middle and the top end. This way, the employer has a better chance of being fair and the transparency will help. Compensation ranges should be built by analysts who understand how to value labor. We can leverage that knowledge to create a fair process. Asking candidates to provide their desired salary is not fair and puts them at a disadvantage right from the beginning. Asking for a desired salary with the knowledge of the range makes more sense, but better yet is to share what the range is and the experience required for specific points on the range.
For the average job seeker, the power typically resides with the employer. Some candidates can write their tickets, but that’s not the majority of candidates. Women and minorities in particular need this kind of action to overcome long-term bias that perpetuates unequal pay. The law helps us become conscious. We can no longer enter the process and not be aware that a lack of pay parity exists. The challenge is taking the additional steps to strengthen our process to reduce bias. We will never eliminate the human bias, but we can certainly shore up our process to make it much easier to be fair.
Employers' Risk
One natural consequence is that we will have to deal with perhaps one or two candidates who we cannot close on because they want more than we are offering. Of course, that is not a new phenomenon and not likely to go away. Perhaps the transparency will make it easier for candidates to decide early if they are interested in the role and the pay being offered.
Our biggest risk is remaining an employer who puts employees in a difficult position at the start of a recruiting process by requiring they disclose what they want to earn and how much they have earned previously. Some employers will get it and make the change. They will become the employers of choice. And some employers will miss the opportunity to demonstrate through every part of their process that they value the contribution of all employees and are committed to driving change and equality for all.
