Want To Take A Major Chunk Out Of The Pay Gap? Stop Asking New Hires For Salary Histories

We’ve all been through the nerve-wracking endeavor of finding a new job. You have to jump through all the hoops: updating your resume, re-writing your cover letter, filling out countless job applications, networking to find the best fit, and then it gets real: the face-to-face interview. It’s all part of the journey. But there’s one part of the hiring process that is not only unnecessary, it can hurt a worker’s pocketbook.

I’m talking about the salary history portion of the hiring process. Sometimes an employer will request a job applicant’s salary history in order to determine the new hire’s pay. This seemingly innocuous practice can actually have major repercussions. Why? Because it can contribute to the perpetuation of the pay gap many women and people of color face in their careers. If a worker faced a pay gap (and thus lost wages) at one job – perhaps because of bias or even outright discrimination – basing her next job’s salary on the one prior only continues that pay gap. Relying on salary history to set future salary assumes that prior salaries were fairly established. Anyone see a problem here? Salary history questions can, in fact, introduce bias and discrimination into the recruitment process of a company earnestly trying to avoid it. But there have been recent efforts at the state and federal levels to end this deceptively harmful practice, adding a welcome tool to our growing arsenal of resources to eliminate the pay gap once and for all.

Pay equity advocates and women nationwide were thrilled this past August as Massachusetts enacted a revolutionary new equal pay law, which included a provision banning employers from using salary history when screening and hiring new workers. It’s common place in the working world for employers to ask about previous wages, and to use that information to set wages in a new job. But really, what does prior pay have to do with a worker’s ability to perform this new position? And shouldn’t a worker be compensated based on what her skills (and the job in question) are worth to the new company, rather than based on a different job she did in the past? For women and people of color especially, who have likely been taking home a lower wage already, pegging earnings to a previous job perpetuates the pay gap. In short, use of salary histories ensures bias and discrimination follow workers wherever they go, whatever their job, no matter their abilities. Curtailing this practice will go a long way in our fight for pay equity.

Followers of the Massachusetts’s law may not realize their attempts were not new. Last year, when California passed their excellent equal pay bill, they also passed their own version of a bill banning salary history. Unfortunately, it was vetoed by Governor Jerry Brown. This year, California tried again, with updated language and further input from businesses. Thanks to some amazing work by AAUW of California and others, the new bill was signed by the governor last week.

Other states are taking notice and enacting a range of fixes to the gender pay gap as well. Maryland, Delaware, Nebraska, and Utah each passed equal pay bills in 2016, in addition to the good work in California and Massachusetts. State legislators in red, blue, and purple states all realize that the pay gap is real and something needs to be done about it.

Unfortunately, Congress didn’t get that memo. The Paycheck Fairness Act remains mired in gridlock. I’ve also written a time or two about how Congress should follow the states’ lead and make moves on their own equal pay legislation. Our system of democracy is designed to generate and pilot ideas in the states, then allow the good ones to bubble up to the federal level. That’s why I’m thrilled that Congresswoman Eleanor Holmes Norton (D-DC) has introduced the Pay Equity For All Act. Apparently Norton took a hard look at Massachusetts’ new law, and together with her colleagues Reps. Rosa DeLauro (D-CT), Jerry Nadler (D-CA) and Jackie Speier (D-CA), liked what they saw. Congresswoman Norton’s bill aims to ban the use of salary history in similar situations as the Massachusetts law. Now it’s up to the rest of her congressional colleagues to take real action for women and people of color and pass this much-needed bill.

It’s important to note that Massachusetts’ law had broad bipartisan support and passed both chambers unanimously. It was signed into law by a Republican governor and endorsed by several business groups, including the Greater Boston Chamber of Commerce. We’ve seen the same process happen in California with its improved equal pay laws. There’s no reason actions like these can’t happen in blue, red, and purple states or even on Capitol Hill. Those instances alone show there is support for this type of legislation and that it can be passed, when people of goodwill come together for the right cause. I hope Congress is paying attention!

Employers need to start paying for what the position is worth to the company, not based on the salary history of their prospective hire. Thanks to an over-reliance on salary histories, we know if a woman starts her career with a pay gap that it’s likely to follow her throughout her working life (and ultimately negatively impact her retirement). Efforts like those in California and Massachusetts, and now at the federal level, are excellent steps in the right direction to removing needless and frustrating roadblocks on the road to equal pay.

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