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Basing new-hire salaries on local market value, retraining recruiters and hiring managers on screening and interviewing, and conducting internal wage audits are a few of the ways employers can get ahead of the trend of prohibiting inquiries into candidates' previous salary, experts say.
Since 2016, a growing number of cities and states have passed laws banning employers from asking about candidates' previous pay as a potential solution to closing the wage gap between men and women. Those cities and states include New York City, Philadelphia, San Francisco, Delaware, Massachusetts and Oregon, among others.
The theory is that women sometimes have begun their careers at a pay disadvantage, and if their past salary is used as a marker for future salary offers, their pay will remain behind men's.
"What might have been a historically reasonable question can actually trigger some unintended consequences that can lead to widespread pay inequality by gender," said Dawn Lyon, vice president of corporate affairs at employer review site Glassdoor and chief equal pay advocate for the San Francisco Bay area company. "If we recognize numerous reputable sources validating the gender pay gap is real … then by asking prior salary history to inform offers, employers are potentially perpetuating the problem from day one."
Others believe that while salary history can play a part in gender wage inequity, there is a complex set of other factors involved. "There really is a gender wage gap, but it appears to be primarily due to factors other than employment discrimination," said Robin Shea, a partner based in the Winston-Salem, N.C., office of Constangy, Brooks, Smith & Prophete.
Factors other than gender that could affect pay include job position, work experience, education, skill level and time in the workforce, she explained. "Historically, women have entered the workforce later than men, and they have had more career interruptions because of parental and other family responsibilities. In addition, men tend to be more willing than women to take jobs that are physically strenuous and even dangerous. Those jobs are often more highly compensated precisely because of the demanding and dangerous nature of the work."
Shea said that recent studies show there is virtually no wage gap when comparing the pay rates of younger men and women before the age when women typically start having children.
Employers should pay attention to the issue of bans on questions about salary history regardless of where they stand on the debate over the existence of a gender wage gap and its causes. Glassdoor found that more than half of U.S. workers (53 percent) support bans on salary history questions during the hiring process. Notably, more women (60 percent) than men (48 percent) feel this way.
Recruiters have historically relied on salary history queries to determine whether a candidate's current pay is above the employer's range, thereby avoiding wasted time and resources. But employers can address that issue by including a salary range in the job posting.
"There is a mistaken sense that if employers can't get information on past salary amounts, they can't set an offer for employment at the right pay level," said Kelly Marinelli, SHRM-SCP, an attorney and president and founder of HR consultancy Solve HR in Boulder, Colo. She added that "lucking out" and "getting a cheaper employee because he or she doesn't understand the value of the work is only a short-term gain, because it creates compliance risk, can generate negative cultural impacts at the organization as inequities emerge, and can even cause employer brand damage as this information is shared publicly."
Complying with Salary History Bans
Recruiters will need to find alternative ways to figure out salary ranges before speaking to candidates. Lyon recommended that before the first interview, recruiters, hiring managers and HR get together to determine the value of the role and what will drive a higher or lower compensation package, and then base interview questions on those topics.
"Determining the real market price range for a position is the right way to choose a competitive salary level," Marinelli said. "Specific benchmarking by industry and geographic location is the best way to hone in on a pay level that will be attractive to job seekers without being out of the appropriate range."
Employment attorney and HR consultant Kate Bischoff, SHRM-SCP, agreed. "Using the candidate's current pay rate places too much importance on the pay at a single employer and not the market as a whole," she said. Bischoff is the founder of tHRive Law & Consulting, based in Minneapolis.
HR should also retrain recruiters and hiring managers on how to comply with these laws, experts agreed. "Retraining shouldn't be too hard," Bischoff said. "You are simply asking managers and recruiters to stop asking one question and ask substantive questions instead."
Ongoing training on the organization's compensation philosophy and strategy is also key for recruiters and hiring managers, Marinelli said.
Employers can learn a lot about candidates from general conversations about salary expectations, but what can be said during these chats varies from law to law and recruiters will need to tread carefully. "Although salary ban laws vary from jurisdiction to jurisdiction, employers may be able to ask candidates for the salary rate that they would accept," Shea said.
"This is the way employers find out what is of value to the potential employees they want to attract," Marinelli said. "Ideally, this inquiry should happen at the initial screening stage, so that the employer and job seeker don't waste time in the process if their expectations are not close enough together to make it worthwhile."
Lyon recommended simply asking, "What are your expectations for pay in this role and why?" which could lead to a fruitful conversation between the employer and the candidate on salary expectations, the specific role and its requirements.
Bischoff advised that HR professionals ignore when a candidate volunteers past salary, as it could become a source for litigation. "Please do nothing with it," she said. "Don't write it down in your interview notes. Treat it like you would treat … information volunteered in the interview" that pertains to a protected class, such as race or age.
Employers should also consider conducting internal wage audits to measure progress in closing any wage gaps, experts agreed. Marinelli recommends a wage audit coupled with an in-depth talent development review so that appropriate adjustments can be made.
"Be proactive here," Bischoff said. "With the near-constant focus on pay equity issues and new initiatives coming from nearly all levels of government, employers cannot afford to place their fingers in their ears or hands over their eyes. Do a wage audit. Involve an attorney to get their expertise and attorney-client privilege. Then fix any issues you find."
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