Banning Salary History

As the president of a local SHRM chapter in South Dakota, I have the privilege (?) of receiving legislative updates from our lobbyist. Which is actually rather nice and interesting. Typically, my knowledge of what’s going on legislatively in the state has been limited to what others share on Facebook and Twitter (and there’s not a lot on Twitter).

One of the bills introduced this year is to enact legislation making it unlawful for employers to ask candidates for their salary history. Many states and local municipalities have already done this. I’m a little impressed that it is coming up already in our legislature (we are typically a bit behind the times here in conservative South Dakota). From the bill:

  • It is an unlawful employment practice for an employer to:  (1)    Require, as a condition of employment, that an employee refrain from inquiring about, discussing or disclosing information about either the employee’s own wages, or about any other employee’s wages. Nothing in this Act obligates an employer to disclose an employee’s wages to another employee or a third party; or (2)    Seek the wage or salary history of a prospective employee from the prospective employee or a current or former employer or to require that a prospective employee’s prior wage or salary history meet certain criteria.

The email came from our lobbyist with the comment that she assumes we will oppose. I immediately commented that I’d like to talk about it more because, on it’s face, I do not oppose this kind of legislation. The past has proven that most employers only want to see how cheaply they can get a new employee and by knowing their past salary can attempt to get someone by going just a little above that while staying within their salary range (assuming they have one). Even pay policies that appear unbiased (see this case from the 9th Circuit) on their face can cause discrimination if you use salary history as a basis, because as a whole, women are typically paid less than men (and yes, I know there are a myriad of reason for this not all having to do with discrimination, but if we are being honest, many of those reason DO come down to male vs. female — I’ve even recently heard that “he needs to be paid more because he needs to take care of his family” even though “he” doesn’t have a family).

We had some interesting conversation via email, with some opposition to the bill because it will make pay practices more difficult, market data not easy to find, people will come in with unreasonable expectations and that knowing the history is much more helpful to the selection process as a way to screen out candidates. And again, it helps us get the candidate as cheaply as possible. Honestly, I do not think there is anything wrong for a business to watch their bottom line, to get the “best deal;” however, I do not believe it should be done at the expense of fair and equitable pay.

So naturally, I took the question to Twitter and asked my #HRTribe for their thoughts. Most who were, well, not opposed per se, but unsure of the need for such a law, felt that if employers, HR, recruiters are truly doing their job, they should be offering salaries based on experience, fair market value and their assigned salary range. Performing regular job description reviews and market information should be a part of an HR professional’s role. And I completely agree. Roles and responsibilities change and the written job description should keep up. However, as history shows in many areas, businesses sometimes need a, ahem, push to do the right thing.

By continuing to allow businesses to use salary history as part of their consideration when determining a salary, we can be assured that women and people of color will continue to lag behind in wages.

Most of the #HRTribe is in favor this kind of legislation, (see their comments on Storify) primarily for the above reason. It will change how we do business, for sure. I’d like to see an addition of ensuring businesses include a salary range or at least a starting point for their posted position. Let the candidate self-select themselves out. If you cannot afford them based on their personal salary needs, why waste anyone’s time? This on-going practice of it being “unprofessional” to discuss salary “too early” in the process needs to stop. We are all working for a reason and very few of us would continue on in what we are doing without that pay check. Benefits and working conditions will keep someone on board, as long as the pay is fair and equitable.

So here’s my proposal, #HRTribe, let’s raise the bar. Let’s make reviewing job descriptions and salary ranges as part of our routine. Make changes (or recommendations for changes) as necessary to remain competitive. Post your salary range to help the right candidate find your job (unless you truly are willing to pay “commiserate with experience”); stop trying to cast the “widest” net possible. Ask your candidates for what salary they are seeking – you never know when or why someone might be willing to take a pay cut. Let your candidates make that decision; do not make that choice for them.

I’d like to close by pointing you to this DisruptHR Indy 2.0 talk by Jon Rosser. In his talk, he covers why companies are still doing this, why it needs to stop and how we can make the change individually. I would hope that my fellow professionals are already working towards this.

So, until all companies (and all HR professionals) can show that they truly are able to make changes like this without influence from the government, I will continue to support this kind of legislation.

 

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4 thoughts on “Banning Salary History

  1. Andy

    Great article. Out of curiosity, do you know how SHRM decides what its “party line” is for legislative issues like these? Another relevant example is the overtime rule drama a few years back, which seemed just as polarizing.

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    1. That’s a really good question. I was also not on SHRM’s side for the overtime rule stance. A lot of times, we seem to lean to heavily on the employer side and not on the employee side, which I think is part of the current push to “not go to HR.”

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