Massachusetts is in the process of making history by making it illegal for employers to ask job applicants for their salary history. Here are 10 reasons why the rest of the U.S. should follow suit.
1. Every open position has a pay range that is established when the job is created. Requiring job-seekers to disclose their salary history only gives unscrupulous employers good reason to offer the job applicant less than what the job actually pays, or a salary at the bottom of the range even when the applicant's experience warrants a higher pay rate. This creates inequitable pay differences based not on capability but on a job applicant's salary history -- an irrelevant factor.
2. Massachusetts moved to prevent employers from requiring salary histories because it found that women and minorities tended to be underpaid in past roles. If that inequity is allowed to persist because employers are permitted to learn their job applicants' salary histories, then those pay gaps will continue over time instead of being closed.
3. Sometimes working people take low-paying jobs because those jobs are close to their homes, because they're in school or have family obligations, and for other reasons that have nothing to do with a job-seeker's worth. If companies are allowed to probe into job-seekers' salary histories, they may inaccurately peg a job applicants' market value to his or her past salary.
4. Most job interview questions that have no clear relationship to a job-seeker's qualifications for the job are prohibited by law. It is illegal, for instance, to consider a job-seeker's race, ethnicity, marital status, pregnancy status and other non-job-related factors in making a hiring decision. An applicant's past salaries are also unrelated to his or her ability to do the job. Why then is it still legal in most places to pry into a job-seeker's personal financial details?
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5. One of the most common reasons people job-hunt is that they are underpaid at their current job. If employers can demand your salary history (and even pay stubs or copies of your tax return) how will underpaid employees ever get paid what they're worth?
6. Some employers say that they "need" a job-seeker's pay history in order to establish the job applicant's qualifications for the job, but this correlation is not reliable or proven. U.S. employment laws generally require employers to make hiring decisions based on a job-seeker's qualifications, not other, extraneous factors. I was an SVP of HR for many years, and I know from experience that a person's pay history has zip-all to do with his or her suitability for a job opening. Only lazy recruiters and hiring managers rely on a job-seeker's salary history in making a hiring (or compensation) decision.
7. Some employers will decide that an applicant is ineligible for hire strictly based on his or her pay history. They may be unwilling to interview candidates who earn more than a job opening pays, and also to decline candidates whose past salaries are low enough that the employer decides "This person couldn't possibly be qualified." These are subjective, fear-based determinations that keep great people and talent-hungry hiring managers apart for no good reason.
8. Staffing managers who have relied on salary history as a means of pegging a job-seeker's worth (and a way to limit the size of the starting salary offer they extend) will tell you that they shoot for an 8% or 10% increase (for instance) over a job applicant's current or most recent pay package. We do not ask the plumber, "What did you charge your last client?" We ask the plumber, "What's your hourly rate?" and once we hear the plumber's rate, we can hire the plumber or say, "No, thanks." Why should recruiting work any differently?
9. The mantra of corporate and institutional America and every other country that has adopted the American way of business is "We pay for the position, not the person." However, employers make a glaring departure from this logic when they base a person's starting pay rate on their last salary. If you really pay for the position and not the person, then you won't need to know what someone was earning elsewhere in order to determine what to pay them now!
10. Recruiters, HR folks and managers who can't value an applicant based on his or her resume and a human conversation are not qualified for their posts in the first place. People who know how to match job-seekers and job openings don't need a crutch like salary history to help them do their jobs. It's time we all grew our recruiting muscles and learned to make our own assessments of a candidate's value, unaided by unfair inside info that no one would cough up voluntarily!
We don't need to bully job-seekers into disclosing personal details, including the contents of their past paychecks. We can step into the new-millennium workplace and pay job-seekers what they are worth -- something the best recruiters and hiring authorities have been doing for years.
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