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Talking $Money with Applicants

April 30th, 2018 by Jackie Doherty

Back in the old days, the question might be “How much did your last job pay?” But times and laws have changed, and savvy HR Leaders know the safest way to discuss salary doesn’t reference wage history.

New restrictions on how employers question applicants about compensation are based on the belief that when employers know what you made in the past, it contributes to the gender and racial pay gap that persists in the US. For instance, if one group is underpaid, basing salary offers on prior wages does not advance them to market rates or minimize discrepancies in earnings.

Although more than 50 years have passed since the Equal Pay Act, according to recent data from the US Census Bureau, women earn 80.5 cents on average for every dollar a man earns. When race and ethnicity are factored in, there is an even greater disparity in earnings.

In an attempt to reduce the wage gap, new laws are expected to help level the playing field, but the restrictions vary by state and in some cases, by city. For instance, Massachusetts passed a law restricting the ability of employers to ask for salary and wage history that will take effect July 1, 2018. New York City’s ban on salary history questions took effect Oct. 31, 2017. Several other states (CA, OR and DE) as well as Philadelphia and Puerto Rico are in the process or have already passed similar laws.

In light of the new laws and the ever-changing landscape around this issue, JCSI recommends taking the no-risk approach when discussing salaries with applicants:  JCSI recruiters do not request or otherwise discuss salary history with candidates, and we advise our clients to do the same. If a candidate voluntarily discloses salary history to us, we inform them of our policy and return the focus of the interview to the candidate’s qualifications for the position. Instead of asking about salary history, we ask applicants what is their desired salary for the current opportunity.

According to a Pew Research Study, while hourly earnings of white men continue to outpace women, there has been some progress since 1980. Perhaps these new laws will hasten wage equity across all groups. Either way, Hiring Managers and Recruiters avoid legal risk by addressing these delicate salary conversations in a manner that does not include wages earned for past roles.

For more information about JCSI recruiting consulting services and how our team can get better candidates into your pipeline, faster, and for less cost, contact us today!

Posted in the category Advice for Hiring Managers.

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