Closing the Wage Gap - Salary History Bans Increase
Salary history bans started back in 2017 with the intent of closing the wage gap. Currently there are 17 states and 19 local cities or jurisdictions with salary history bans. While this doesn’t affect an expected salary question that your background check partners might ask, it’s nevertheless an important topic to discuss when dealing with workplace law compliance.
History of Prior Salary Bans
In January 2017, New York was the first state to ban prior salary questions from state and government positions with some rules and limitations. By the end of 2017, two states - NY and OR - and several cities imposed the ban. Some only included government agencies, others didn’t discriminate and called for the ban to include all companies, government or non government businesses. Almost three years have passed since the first ban and the number of states and cities imposing these bans has grown to over 30. The forecast looks promising for more salary history bans to be implemented in the coming years, with next years’ election potentially having a large effect.
Prior salary bans are less about leveraging pay negotiations and more about pay disparities, bias and discrimination. According to attorney Sachi Barreiro, “legislatures are beginning to recognize that certain practices perpetuate inequality in pay, even if there isn’t necessarily discriminatory intent.” Asking for a salary history maintains lower wages for women, and especially women of color, which follows them from job to job.
Ban Effects on Business
With an increase in remote workers across state lines and a growing web of prohibitive laws to keep track of, many HR professionals and companies have opted to ask for an expected salary, foregoing the salary history hot topic. Some employers will now provide a bracket of salary expectations to the applicant upon interview or add the information to the job poster itself. “We lay out everything - the job description, hiring criteria and salary range,” Brittany Jenks, HR director for Very, said in an interview with SHRM earlier this year. By providing pay transparency upfront, companies can build immediate trust with their employees and it creates certain expectations on the outset.
Salary history bans are still a topic of debate in over half the country, but with a steady increase of passing legislation over the last two years, companies may benefit from changing salary tactics now rather than later. This brings a whole new set of challenges as some jobs may not have formal pay scales, job grades, or structured compensation practices in place currently. It takes research, time and training to implement a new pay strategy based solely on merit, education, and experience. But the payoff is worth it. Derek Jones, deputy VP of business development at Deputy, pointed out one of the biggest benefits in an interview with HR Dive. He says it benefits recruiters from wasting time with candidates who make it to a phone screen only to be disqualified for being out of that [salary] range.”
At the rate of traction these bans have had thus far, it seems probable that eventually the majority of the country will support banning salary history questions. Many states and jurisdictions have already imposed bans and more are on the horizon. These bans have a positive effect on the applicants, as they reduce unintentional pay disparity and bias, but will take companies time and energy to adapt to new and changing laws.
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