It’s Time for a Federal Ban on Salary History Questions

The State of Massachusetts gets a big thumbs up from me for just becoming the first state to prohibit employers from asking potential hires about their wage, salary, or benefits history as a question during the interview process (at least until after they first make a job offer that includes compensation).

The driving force behind the legislation was to help eliminate the gender wage gap. According to the U.S. Census Bureau, women are still paid just 83 cents for every dollar that men are, per weekly median income. Median pay is different than equal pay for equal work, but research shows that even for equivalent jobs and education requirements, there is a disparity in pay from the first job post graduation, and it persists (and increases) with subsequent salary negotiations.

However, there aren’t just gender wage gaps, but equally as damaging racial wage gaps as well:

wage gaps

Wage gaps, for equal work, are discriminatory and are actually already prohibited at the federal level. Title VII, the ADEA, and the ADA prohibit compensation discrimination on the basis of race, color, religion, sex, national origin, age, or disability. However, proving that an employer has intentionally discriminated due to one of those factors is extremely difficult. And when an employer can legally ask (or more often, demand) salary or wage history, it shifts the burden of responsibility for equal pay to the previous employer.

Discriminatory (whether intentional or legacy from prior employers) wage gaps are bad, real bad. And that is enough, in my opinion, to place a federal ban on asking salary, wage, and benefit history.

But there’s another reason why I absolutely despise when employers ask the dreaded salary history question and think there should be a federal ban on it: it’s completely irrelevant to how much you should be paid for the job you are interviewing for!

Nobody leaves a job with the goal of achieving the exact same role, responsibility, and pay. No – we leave in order to enhance or completely change responsibilities (and in many cases, we should be compensated at levels far above what we previously made). We can and should always look for better jobs with better pay.

There are many other factors at play as well that make salary history irrelevant, including geographical pay differences, the value of the total benefits package, level of experience at the moment of taking the job (instead of previous wage leveling), and more.

You should be compensated for what your work is currently worth for the role that you are applying for – not for the role you previously had. But employer’s ask the salary history question for one reason, and one reason only: they want to pay you as little as they possibly can get away with.

The best way for them to do that is to find out what you’ve been making and offer an inoffensive amount that is just slightly above that. The salary history question, therefore, is a complete drag on much needed wage growth in this country. There are other factors at play, but it is definitely a contributing factor to the stagnant median household incomes we’ve seen since the year 2000:

median household income

Americans are overworked and underpaid. Any little bit we can do to get wages moving again to help heat up the economy is a good thing.

But prohibiting the salary question wasn’t the only measure that Massachusetts took. They also:

  1. prohibited employers from requiring, as a condition of employment, that an employee refrain from inquiring about, discussing or disclosing information about either the employee’s own wages, including benefits or other compensation, or about any other employee’s wages.
  2. prohibited employers from seeking the salary history of any current or former employee.

That’s the kind of common-sense employee protections that all Americans should be afforded. And we should all write our elected officials to push for it.

A big shout out goes to the state of Massachusetts for moving us in that direction.

Meanwhile, when employer’s ask you the dreaded salary history question, you can just reply with,

“My employer prohibits employees from discussing compensation.”

Or, if you’re feeling really adventurous,

“My prior role is not the same as this role. What is the median pay for people currently in this role at your company? I think that would be a more relevant discussion.”

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