Salary History: should we be asking the question?

Is it a social taboo to open career conversations with questions relating to prospective candidates’ current salaries? The jury isn’t quite out on this one, but it is certainly getting people talking.

What is your current salary?

It seems like a pretty straight forward question when you think about it. The reasoning behind the enquiry can be perceived as perfectly acceptable upon first thought. We need to know if the candidate will be interested in the salary package on offer for the position. In many cases it’s as simple as that. But is it appropriate to ask a candidate about their salary history?

What’s the issue?

Dawn Lyon, Glassdoor Chief Equal Pay Advocate and Senior Vice President of Global Corporate Affairs states, ‘the time of looking backward to go forward to determine pay is over. Asking prior salary history questions can trigger unintended consequences and introduce bias into the hiring process that disadvantages women from day one.’

US Perspective

In the US last month, California joined a number of states where it will now be illegal to enquire into the salary history of applicants. Some cities are also adopting this law. New York City recently adopted an ordinance that will become law in late October. San Francisco has signed an ordinance which will go into effect on 1st July 2018.

UK Perspective

In the UK it is illegal to pay different amounts to men and women doing the same jobs under the Equal Pay Act. If you believe you are being paid less than a fellow employee for work of equal value there are actions you can take. However, an employer may defend a claim if they show the reason for the difference is due to a genuine factor and not based on the sex of the employee.

Should we be asking for salary history in the recruitment process?

New York’s Public Advocate, Letitia James, says we shouldn’t be asking this question as it promotes wage inequality, “being underpaid once shouldn’t condemn you to a lifetime of inequality. The old ways of attacking the problem aren’t working. We’ve got to pursue new approaches — like attacking wage disparities at their subtle but pernicious roots.”

What should we be doing instead?
1. Change the question

Lyon says by asking questions such as ‘what are your expectations for pay in this role and why?’ will lead to conversations about the type of salary the candidate would be looking for in a less abrupt way.

2. Have a salary banding in mind for each position

Lyon also states that, ‘Before the first interview, hiring managers should work with their HR and recruiting teams to determine the value of the role, get very clear on what will drive a higher or lower compensation package (ie. specific skills, management experience, etc.) and base interview questions around those topics.’

Next steps

It is unclear yet whether banning salary enquires in some states and municipalities has had a positive impact in terms of closing the gender pay gap. However, due to its increased popularity in the US it is best to be prepared for the eventuality of a similar law arising in the UK.