Friday, June 16, 2017

“What were you making at your last job?” How important is this question to you, as an employer?

We previously blogged about the ban-the-box movement that began several years ago, which allowed job applicants to avoid answering questions about their criminal history when applying for federal jobs. Similar to this, the movement to ban questions about applicant’s salary history has been raised in many cities and states.

Most recently, on May 4, 2017, New York City signed a bill into law that prohibits asking about or relying upon the “what was your previous salary?” question. The new law will make it an unlawful, discriminatory practice for both private and public employers to ask this question, or any question about their salary history, in determining their salary amount for potential employment with the company. This includes the applicant’s current or prior wages, salaries, benefits, or any other form of compensation from their previous employment. There is one wrinkle, though. This law, which goes into effect October 31, 2017, does, however, allows employers to consider an applicant’s salary history if the applicant volunteers this information, without being asked.

This law followed similar legislation enacted earlier this year in Philadelphia and Massachusetts. While the Philadelphia ordinance is temporarily on hold. during a Chamber of Commerce challenge to its constitutionality, it has made employers think about the reasons for asking it in the first place. Employers typically ask wage history questions to consider how other companies viewed the employee’s worth. It goes hand-in-hand with an applicant’s resume and references to show experience, knowledge, and value.

Another reason employers ask this question is to see if the applicant is a practical candidate. If an individual’s prior salary was either much higher or much lower than the potential position offers, an employer might be able to pinpoint a conflict early on. This allows an employer to avoid wasting the applicant’s time and their own time if they feel as though the offer will be declined, or the applicant has not achieved the level of experience required.
While employers have reasons for these questions, problems can arise from using the answers given. If the responses given by applicants are based on pay inequalities or underpayment for their services, applicants will be restricted in many opportunities for which they are perfectly qualified. Moreover, those pay inequalities or underpayment may follow into their next job.

Although New York City is only the third jurisdiction to enact this type of law, the talk of the topic is spreading quickly. Employers should consider how this question helps or hurts them and whether it is necessary for their decision making. We will monitor state and city legislation on this topic to keep readers up to date.