May 9, 2018
Asking the prospective employee for their salary at their last job is common–and if your practice is based in some states, it’s now illegal, according to reporting from The New York Times.
Several states, cities and companies have recently banned asking about salary history, including Massachusetts, California, New York City and Chicago, as well as Amazon, Google and Starbucks, The Times reports.
The primary driver of these laws is the belief by some that asking for most recent salary perpetuates the pay gap for women and minorities.
“Women continue to earn less than men, for a variety of reasons. Discrimination is one, research shows. Women are also likelier than men to work in lower-paying jobs like those in public service, caregiving and the nonprofit sector — and to take time off for children,” Claire Cain Miller writes in the Times report. “Employers often base a starting salary on someone’s previous earnings, so at each job, the gender pay gap continues, and it becomes seemingly impossible for women to catch up.”
In addition to narrowing the pay gap, The Times notes studies that suggest that when the employer does not ask about previous salary, a more diverse group of job applicants are considered.
“When employers don’t rely on past pay as a proxy for how valuable someone is, they might consider a wider variety of candidates. A recent working paper was based on an experiment in an online job marketplace: Half of employers could see applicants’ past pay and half could not,” Miller writes. “The employers who could not see past pay viewed more applications, asked candidates more questions and invited more for interviews. The candidates they hired had, on average, lower past wages, and struck better deals when they negotiated.”