Most of us have been in this position; nervously sitting in front of your interviewer, cross-eyed, whilst watching a ball of sweat roll down your forehead, trembling, whilst taking a sip of water and hoping they won’t bring up the dreaded question, ‘What salary are/were you earning?’. Effective from October 31, 2017, all employers in New York City will be prohibited under the NYC Human Rights Law from inquiring about or relying upon an applicant’s salary history during the hiring process. New York joins a small but growing number of states aiming to close ‘The Gender Gap’ and pay inequality.
What does this mean?
The new law makes it unlawful discriminatory practice for employers to ask applicants (in person OR application) about previous compensation including wages, benefits, bonuses, and commissions, but does not include objective measures of productivity, such as revenue or sales. The new law applies to all employers, employment agencies, or employees or agents but it does not apply to applicants for internal transfers or promotions with their current employer.
Employers – watch out!
Sometimes, employers will ask salary history questions to determine the new hire’s pay. However, relying on salary history to determine a candidate’s worth now, assumes that it was established fairly. Salary history questions can introduce discrimination into the recruitment process of a brand who in fact, may be trying hard to avoid it. If a worker faced a pay gap or were discriminated against financially in their previous role, taking this into consideration to determine their worth now only continues to contribute to the pay gap. Employers need to ensure that they are paying for what the position is worth to the business, rather than base it on what the successful candidate was earning before. Employers need to adapt, you need to revise your recruitment strategies and ensure it is compliant with the new law. If you are working with third parties to attract talent (such as employment agencies), you need to be having conversations with them too to ensure they are aware of the changes you are working hard to roll out. Employment agents represent the employers they work for and if they are unaware of your new recruitment strategy, your market will be too.
Job-seekers – did you know?
It is now up to you to volunteer this information, only if you want to. There is no obligatory requirement to offer these types of details, but if you are asked to provide them there is action you can take. Some companies may well be trying to ignore the law or may be unaware of the changes taking place - despite Letitia James’s efforts to spread awareness. It is your job to ensure you don’t fall afoul of this. If asked the question during an interview, there are different ways to re-frame the conversation:
- Discuss salary expectations, rather than previous earnings.
- Research your market and discuss noticeable trends.
- Relate the conversation back to the job itself and focus on the value you plan to bring to the job and the company.
This is a huge step forward for the activists and advocacy groups hoping to close the gender gap and it aims to disrupt the hiring process within these states, for the better.
Some of the other laws being introduced are:
- California has banned private and public employers from asking about a candidate's pay history. The law will take effect in January 2018, according to HRDive.com.
- Delaware banned all employers from asking candidates about their salary history. The law will take effect in December 2017, according to Duane Morris.
- Massachusetts prohibited all employers from inquiring about a candidate's pay history. This law will go into effect in July 2018, according to Mass.gov.
- New Orleans banned inquiries about all city departments and employees of contractors who work for the city. The rule is already in effect, but, in this case, it only impacts individuals who are interviewing to work for the city of New Orleans, according to WDSU.
- Oregon has banned all employers for inquiring about a candidate's salary history. The law goes into effect January 2019, according to Jackson Lewis.
- Philadelphia banned the salary history question for all employers. The rule was supposed to take effect May 23 2017, but a judge halted it temporarily due to a lawsuit from the Chamber of Commerce, according to NBC.
- Pittsburgh banned city agencies from asking about candidates' pay history. The rule is effective immediately, but only effects city employees, SHRM reported.
- Puerto Rico banned employers from inquiring about a candidate's pay history. The law will go into effect March 2018, according to Jackson Lewis.
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