According to a recent survey released by WorldatWork - a non-profit total rewards association - 44% of employers who have applied a ban on asking job candidates about their salary history stated that doing so was very or extremely simple. Only 8% reported it to be very difficult and 1% said extremely difficult. The survey consisted of 838 compensation and benefits professionals.
It was found that 37% of employers have employed a policy prohibiting interviewers from enquiring about a candidate’s salary history in all US locations - whether or not a law exists - and 35% do not ban questions about salary history. The companies applying the ban were found to be, in general, larger organizations. Of employers who have not implemented the ban, 40% are "somewhat likely" or "extremely likely" to do so in the next 12 months.
Sue Holloway, WorldatWork Director of Executive Compensation Strategy, said:
"As more cities and states pass laws prohibiting employers from asking job candidates about salary history, more employers are adopting nationwide U.S. policies. I'd expect this trend to continue, especially as pressure builds for employers to justify their pay practices and ensure gender pay equity."
She added:
"The idea of having to craft a total rewards offer without salary-history information can be daunting to some managers and employers, but when hiring managers and recruiters are educated and given reliable compensation data on market rates and pay ranges, the need for a candidate's salary history diminishes."
Salary history data may still be used when internal candidates are being considered for new roles, as the survey found that 84% of employers do not prohibit consideration of an internal candidate’s current pay for setting pay in a new role. Furthermore, 80% of employers rely on salary history in determining an offer that is acceptable to the candidate.
Kate Bischoff, founder of tHRive Law & Consulting based in Minneapolis, said:
"This one is tricky, because in many organizations the person putting together the offer is the person who also knows the salary. The temptation would be to increase salary based upon what someone is currently making but maybe not to where the market would put the salary—to save the organization some cash while knowing that the individual will say yes to the new job."
But she added that the use of the current salary is not what the salary history ban laws are designed for – adding:
"They are designed to limit the use of current and previous salaries at the offer stage. So, while I get the inclination, I would still recommend employers use market rates to base salaries."
The WorldatWork report - “Quick Survey on Salary History Bans U.S.” - summarizes the results of the survey, gathering information to understand approaches organizations are taking to comply with new laws and the changing landscape of U.S. salary history bans.
