Employers Adjust to Salary-History Bans

The number of states and cities banning employers from asking job seekers to reveal their salary history is growing so fast that two states, Michigan and Wisconsin, have reacted by passing a ban against such bans.

Those moves are bucking a much broader trend, however, as 17 states and several localities now have some form of prohibition against salary-history questions.

For HR professionals and hiring managers, this growing patchwork of laws requires vigilance and training so that everyone involved knows what they can and cannot ask a job candidate.

Now that it's increasingly common for people to work remotely—and in different states—it may simply be too much effort for multistate employers to track these bans.

"Best practice is to have one approach for handling salary negotiations," said Carolyn Cowper, vice president of performance and rewards with The Segal Group consultancy in New York City. "Shift the conversation to the candidate's salary expectations rather than salary history, then move on to focus on the candidate's skill set and qualifications for the role," she advised.

To let job seekers know the level of experience and expertise they should have, a growing number of employers post a salary range for open positions—say, $90,000 to $100,000 or $100,000 to $120,000—Cowper noted.

In a strong job market, "it can be better to be forthcoming with salary ranges and what the company feels is the market value of the job," said Carolina King, chief people officer for recruiting firm Lucas Group in Atlanta. This allows candidates to disclose their salary expectations before they get too far into the recruiting process.

"The attention should be on the quality of the candidate's skill set," Cowper said. "The primary focus is finding a candidate who is the right fit," not necessarily someone with the right salary history. Hiring managers, HR professionals and recruiting firms may need to adjust their interview and screening practices to comply with salary-history bans, including by identifying questions they should and should not ask during interviews.

Becoming Transparent

Some employers are opting for greater pay transparency during the hiring process. As director of HR for Very, a technology company with an entirely remote workforce of 36 employees throughout the U.S. and Latin America, Brittany Jenks has neither the time nor the resources to track the growing list of states and localities banning salary-history questions during job interviews.

The good news is that the company's compensation approach doesn't require her to do so. The company's philosophy of compensation transparency allows it to provide salary ranges for all of its jobs. This, in turn, minimizes the need to negotiate pay when recruiting new talent.

"We lay out everything—the job description, hiring criteria and salary range," Jenks said. "It doesn't matter what anyone has made before."

Although this approach doesn't appeal to every candidate, it helps the company identify people who will best fit the company culture. If a candidate demands a higher salary, the company explains that more pay would require giving the candidate a higher-level position. "At that point, we tell them the criteria for moving into that higher role and what they need to do to get to that higher level," she said.

[SHRM members-only toolkit: Managing Pay Equity]

Eliminating Questions, Creating Respect

While questions of pay equity and fairness should be important to employers, there are other benefits to a more open discussion of pay. "If employers want employee trust, and if they want to retain people, they must engage with those employees in meaningful ways," King said. "Nothing is more meaningful than pay in employer/employee relations."

Jenks agreed, arguing that a more transparent approach to pay helps build trust with employees right away. "Employees say that they don't have to wonder if they are getting treated fairly," she noted.

Whether greater pay transparency is widely embraced remains to be seen. However, given the current legislative trend of banning questions about salary history, employers may soon have no choice but to change their pay-negotiation practices.

Joanne Sammer is a New Jersey-based business and financial writer.

Related SHRM Articles:

More Jurisdictions Are Banning Salary-History Inquiries, SHRM Online, April 2019

Congress Considers Nationwide Ban on Salary-History Questions, SHRM Online, February 2019

Do Salary-History Bans Help or Hurt Women?, SHRM Online, March 2018