It’s only been over the past few years that state and local governments have been prohibiting employers from asking candidates about their salary history.
The protection is long overdue, and hopefully Congress will finally abolish the practice that promotes gender-based pay discrimination by enacting a federal law.
Until that happens, however, there’s a patchwork of dozens of laws nationwide that deal with how to handle salary history. That means some states completely prohibit employers from asking about a job applicant’s previous salary, while others actually retaliate against applicants refusing to provide that information.
What’s an applicant to do?
Read more: 19 Salary Negotiation Tips to Help You Earn More
But first, why do employers ask about salary history anyway?
There are many reasons recruiters and employers are interested in your salary history. Knowing how much you made at your last job determines your market value and establishes what your expectations likely are. This knowledge saves time for you as the applicant and for your potential employer: If the company can’t afford or isn’t willing to pay what you expect, then the interview process is a waste of time and effort on both parts.
Employers can also use that knowledge to establish whether you’ve reached your earnings plateau for the position you’re applying for. Large companies tend to have many employees in parallel rank and pay positions. If they are eager to hire you, but you’re already at what they deem to be the top salary for that role, they may have to offer you a more senior position along with the higher salary your history would indicate you’re entitled to.
In addition to being illegal in many states (which we’ll get to later), the practice of asking applicants about their salary history tends to provide useless information. That’s because it’s usually self-reported without documentation such as payslips or verification from previous employers, meaning job applicants can and often do inflate the numbers.
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When are applicants typically asked about salary history?
If you’re in a state where employment laws prohibit it, employers will likely not ask candidates about their salary histories at all. Some might, though, and you’ll have to be ready to provide an answer. More on that in a moment.
However, in states like Michigan and Wisconsin, where employers are legally allowed to solicit the salary history of prospective employees, you can certainly expect to see this request on the job application itself or you may be asked during the initial interview.
In those cases, you should be prepared to provide that information—but if you’re not asked, whatever you do, don’t offer it.
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How salary history promotes gender-based pay disparity
The main reason employers obtain applicant wage history is simply to base a new employee’s salary on what they had previously been earning, says lawyer Sara Kane. “But this had the insidious effect of continuing the ongoing historical disparity in pay.
“In this almost innocuous and most discreet way, by asking what a female applicant earned at her last job, hiring managers, intentionally or not, were perpetuating wage discrimination on the basis of gender,” she says. “Since it is extremely likely that a woman was already being paid significantly less than her male counterparts, by allowing a company to negotiate using a female applicant’s already reduced rate of prior pay, it continues the endless cycle of discriminatory pay.”
And it’s not just that one instance of gender-based pay disparity that undermines the applicant. Wage discrimination is a problem that keeps hurting the employee until they are able to break from it.
In other words, as lawyer Ann-Marie Ahern tells InHerSight: “If salary history is used as the basis for each job transition, this disparity can follow a female throughout her career and compound over time.”
Read more: How to Decline a Job Offer Due to Salary
The practice is banned in some—but not all—states
In order to protect employees from having their new job salaries based on what they were making previously, the practice of asking applicants for their salary history has been banned in many states.
HR Dive, a human resources and workforce management news site, has a running list of salary history bans. As of August 2020, there are 19 state-wide bans and 21 local bans across the country.
According to HR Dive, “the laws are aimed at ending the cycle of pay discrimination and some go further than merely banning pay history questions. A few also prohibit an employer from relying on an applicant's pay history to set compensation if discovered or volunteered; others prohibit an employer from taking disciplinary action against employees who discuss pay with coworkers.”
Currently, no federal law bans salary history inquiries by prospective employers; however, there is a bill called the Paycheck Fairness Act, which has been reintroduced several times since 1997 and is again pending in Congress.
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So what do you do when asked for your salary history?
Do you even have to worry that you’ll be asked about your salary history if you’re in a state where the question is prohibited by law?
Kane answers that question with another: “Will a poorly informed, indifferent, or ill-intentioned hiring manager nonetheless attempt to circumvent these laws? Probably.”
The real answer is, she says, to know your rights.
“Of course, being aware that you may not need to answer that question, does not mean it is easy to do in the middle of an interview. So, applicants should clearly articulate the salary that they are expecting and explain how their years of experience (or other favorable attributes) should dictate their salary.”
In order to do that with confidence, you should also know your market rate, says Ahern, and if asked about wage history, shift the conversation to your salary requirements using phrases like:
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In order for me to leave my current role, I would expect a total compensation package of $______.
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Based on my skills and experience, and the job description I have reviewed, I would expect a salary of $_______ to accept this role.
“Be confident and refocus the dialogue,” Kane says. “Let the interviewer know it’s all about the future, not the past.”
About our sources
Employment lawyer Ann-Marie Ahern is a Principal and OSBA Certified Specialist in the area of Labor and Employment Law at McCarthy, Lebit, Crystal and Liffman in Cleveland, Ohio. She focuses on employee agreements, discrimination, harassment, retaliation, and discharge and counsels executives and management level employees on sensitive career transition issues.
2020 Super Lawyer Sara Wyn Kane, partner at the law firm of Valli, Kane & Vagnini in Garden City, New York, has focused her practice on the negotiation, mediation and litigation of individual as well as complex mass and class actions. She has been appointed lead or co-lead counsel in a variety of mass/class cases throughout the country, often working in tandem with some of the most well-respected plaintiffs’ discrimination and wage and hour firms in the nation.
Throughout her career, Kane has appeared on television to discuss employment discrimination claims generally and specifically regarding cases filed and litigated by the firm. She has lectured and appeared as a panelist on issues relating to employment, wages, and Civil Rights and most recently with respect to the #MeToo movement. Immediately upon hearing about the ability to offer guidance to women and men coming forward with their stories of sexual harassment, Kane signed up for and has been a member of the Legal Network for Gender Equity aka Time’s Up Legal Defense Fund.
