In the past, asking a potential employee about their salary history was a common part of the hiring process. Employers and hiring managers would use this information to eliminate over- and under-qualified candidates from the search, as well as to determine a good offer for new hires.  Recently, however, there has been a growing trend to enact new laws that ban this practice, largely because it can contribute to salary inequalities between men and women and discriminate against others who have been either underpaid or overcompensated in their previous employment.  As this  article by the Society of Human Resource Management states, “Employers have also used prior pay information to set compensation for new hires—a practice that may perpetuate the pay disparity between men and women.”

Remain aware of current laws and regulations regarding salary history

Because the number of states and municipalities nationwide that have adopted this law is increasing, it is important for employers and hiring managers to remain aware of current laws and regulations concerning this issue in order to avoid legal complications. According to an article on HRDive.com, “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.” Therefore, we strongly recommend that every employer be aware of this trend of confidentiality, even if their state does not currently outlaw the practice.

How to discover a candidate’s suitability

For hiring managers trying to determine if applicants could be a good fit for their company, one technique would be to ask them what their salary expectations are. Both the employer and the candidates would immediately know if the position is at least a possible fit or not in regards to compensation. Another approach could be to include the salary range in the job description so that applicants can better evaluate their interest in the position upon initial review.

The world is constantly evolving, and the world of business is no exception. Particularly when legalities are involved, it is vital to stay relevant and responsible by adopting new procedures for the hiring process. If you have any questions about the topic of discussing a candidate’s salary history, we are happy to share helpful information and strategies for navigating the issue. Contact us here to find out how we can be of service to you with your recruiting needs.