Equal Pay Pointers: Why is My Previous Salary Any of Your Business?

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Why is my previous salary something you need to know? This question is one we often ask prospective employers. Even if it’s only the little voice in our heads.  Whether  an employer should be allowed to query prospective job applicants about past or current salary history is a hot topic right now. In the battle for equal pay it is one women cannot afford to lose.

The Sorry Saga of Salary History

Salary history ties neatly into the subject of equal-pay legislation right now. And although business leaders aren’t terribly keen on the idea that they may soon be prohibited from asking job seekers how much they are currently making, the fight to solve this issue isn’t going away any time soon. Chambers of Commerce and other business activist groups are fighting the idea tooth and nail, but they appear to be on the losing side of “salary” history.

Historically, salary history information has been the primary tool used to assess what a job applicant should be paid.  This consideration may override a company’s budget for adding a new-hire.  The prospective employer can then immediately compare an applicant’s current salary to its budgeted amount, and in many cases, shave off a few bucks to save money. If that applicant’s current salary is lower, they will likely be offered less. It isn’t rocket science. But forcing a job candidate to give up the advantage by revealing take-home pay numbers is about to become unlawful.

States Are Jumping on Equal Pay

Massachusetts was the first state to pass such a prohibition, and it is likely that California will soon follow suit. The concept of prohibiting an employer from asking job applicants for their current salaries is, at its heart, about who has the leverage.

There are numerous legislative efforts currently in the works aimed at salary history. They are primarily intended to stem the inevitable pay discrimination the practice creates. It follows most women throughout their careers. If every time a female applicant applies for a job, any salary increases she gets are based on a pay scale that is already lower than that of her male peers, she’s never going to catch up.

Once Massachusetts got the ball rolling, lawmakers in several states (and cities) began pushing similar measures. Philadelphia’s attempts are currently meeting with opposition from conservatives and business interests; but San Francisco and New York City’s bans have passed.  Washington, D.C.’s city council is considering passing a similar ban on salary history questioning.

Enter the Feds

 

The most interesting turn of events is that D.C.’s Representative, Eleanor Holmes Norton, has joined with several of her colleagues in the House to propose a federal prohibition on the issue of mandatory salary-history questioning for job applicants.

 

Do Your Research

Until the laws catch up with common sense to prevent employers from asking for your “salary history” in interviews or on job applications, there are many ways women (and any other applicants) can arm themselves with enough salary information to know when they are selling themselves short.

There is a rapidly growing database of resources available on the web for job seekers these days. Many are even geared specifically toward women. These sites all have varying degrees of helpful information for prospective employees. If you are looking for employment, be sure to research your options. Get reliable information on jobs before applying, and know your worth in the current market.

It’s a Fact, Jack

In the most recent study from the American Association of University Women surrounding the Equal Pay battle, it was discovered that women get paid 6.6 percent less than men at the very beginning of their careers. This statistic held true even when adding controls to the study for college majors, geographic locations and other relevant demographics.  It’s a gap that simply has no explanation but a still rampant gender bias for women in the American workforce. If the market forces a cap on a woman’s growth through the use of a skewed salary history, then women will forever face a gender-based gap in pay.

Do Be a B!tch

Another problem often discussed in this context is that women are less likely to negotiate as forcefully as men. Women are also less likely to demand as much as their male counterparts will. At the heart of this issue lies the reality that women are perceived less favorably than men when “demanding” anything.  In identical situations, focus groups have described men who are insistent on any point as forceful. Women in the exact same scenario are found to be “unlikeable,” “shrill” or “harsh.”  When women do fight for raises or promotions to combat gender pay equity, they’re seen as being “bitchy.” Talk about an uphill battle.

The Anchor Effect: the First Thing You Say is the Only Thing They Remember

A 2011 study from the University of Idaho showed that what many applicants fear is true. When you give the employer a big “number” in that first interview,  it raises your prospects of reaching a higher beginning salary.  This holds true even if that number is much higher than what you are aiming for. The inverse is true for a woman who provides a relatively low prior salary figure.  The interviewer fixates on the original starting point, and the negotiation parameters are inexorably set.  This is true even if that prior salary is lower than it should be due to factors such as race and/or gender bias.  These factors are something to consider while entering into salary negotiations.  Starting low puts women, particularly women of color, at a pretty big disadvantage.

You Are What You’re Worth

And if you think the “anchor” bias is bad, here’s another bit of bad news. Recruiters often use salary history as a factor to evaluate the applicant’s skills.  Before you ever get a face-to-face, entering your previous salary on a job application can land your resume in the trash bin. When head of HR sees a salary they feel is “too high” they decide you are out of reach. It doesn’t matter if you would be willing to take less, you aren’t given an opportunity to say so.  If your current salary is viewed as “too low” they’ll assume you are somehow defective. This occurs before anyone even considers the mitigating factors that may account for the pay disparity.

The Takeaway

The bottom line? Keeping salary history out of the interview process will help to resolve many equal pay issues. Baby Boomers, in particular, are a group who might be well-served by not having to disclose prior salary.  Past-salary “blind” negotiations can help everyone.  Whether you are seeking to change careers, expand horizons and/or procure a higher salary, no one should be forced to take less than their skillset and experience might dictate by a number.   This proposed legislation benefits anyone looking to improve their job options in today’s market. So do your research. Keep an eye on the laws in your state, because the law is changing rapidly. Hopefully, this hurdle will soon vanish from the pre-employment discussion.

LAZEAR MACK, LLP

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