Asking a job applicant about their salary history is about as common as asking for their social security number. You want to be able to assess their worth to your company while trying to keep business expenses low. It’s completely understandable. However, this practice has led some to question whether it is perpetuating pay disparities between majority and minority groups throughout the country. The past two years have revealed that states are starting to get serious about equalizing pay amongst men, women, and minorities.
Legislators in many states have taken note and according to South Carolina labor and employment attorneys, it may soon be illegal for employers in all states to ask potential employees about their salary history. Before you hire another employee, talk to a labor and employment lawyer about your hiring policies first.
State Prohibitions on Salary History Information
In 2016, Massachusetts became the first state to pass a law prohibiting employers from asking job applicants about their salary and benefits histories. Early this year, New York joined Massachusetts with a similar law while California amended an existing fair pay law to prohibit employers from inquiring about applicants’ salary histories.
Other states considering similar laws include Illinois, Maryland, Maine, New Jersey, Pennsylvania, Vermont and Rhode Island.
The Big Debate on Salary History – Why States Are Saying No
Proponents of the law prohibiting inquiries into salary history argue that it will reduce the gender-based pay gap in the United States. According to the Institute of Women’s Policy Research, women are paid 80 cents for every dollar earned by men. Contrary to what many believe, it’s not that women do not negotiate for higher pay. They do, almost as often as men.
Sadly, women tend to ask for less and are more likely to be perceived negatively when they negotiate salaries. These contribute to the disparity in gender workforce salaries.
In addition, negotiating salaries doesn’t always lead to equal pay, not when a rift was already exists. Take two people in the same profession with the same level of experience but one is earning 20 percent higher, even if both negotiated their salaries by 10 percent, one will still be earning higher.
For many women and minorities, the rift starts as soon as they land their first job.
A 2013 study by the American Association of University Women revealed that women were paid 6.6 percent less than men in their very first jobs. When employers base future pay of previous salaries, the wage gap widens, following women throughout their careers.
What This Means for South Carolina Employers
Laws prohibiting employers from inquiring about salary histories have not been passed in the state, meaning an employer can still ask for an applicant’s salary history. Applicants, however, are not required to give information on their salary history. An alternative to inquiring about an applicant’s pay history is to include a salary range in the job posting.
With regard to pay, it is generally better for companies to price positions rather than persons. Gender-based pay gaps can be costly. In 2004, plane manufacturer Boeing was ordered to pay $72.5 million in a pay-discrimination suit to women who were paid less than their male colleagues.
If your hiring policies include asking candidates about their salary history, consult a South Carolina labor and employment attorney to make sure you are operating within the current legal landscape. If you are in need of sound employment law advice, contact Willcox, Buyck & Williams, P.A. today for a consultation.