Salary History on Job Applications and Equal Pay

Equal pay is a hot topic right now, and many organizations are doing what they can to apply best practices! More so, there are over 5 states that have recently passed legislation preventing employers from asking for or collecting any salary information prior to an accepted offer.

Unfortunately, the fact remains that, on average, women are paid less than men throughout the same industries and job positions. According to recent surveys and information provided by SHRM in February 2018, women are still making 80 cents to every man’s dollar. This is even more unequal when it comes to African American and Latino women. These minorities earn 55-60 cents to every dollar a white male earns.

The reason several states are passing legislation and why other organizations are adopting these best practices is because asking for salary history prior to making an offer is contributing to the inequitable pay. The argument is that companies should not use prior or current salary as a benchmark for negotiation. When looking at and assessing a candidate’s performance, their abilities and experience should be the starting point for conversation on how much they should be compensated.

Taking that previous statement into perspective, since we already know most women are being paid less, if you were to ask them, “how much are you currently making?” this is not an equitable starting point if they are among the many who are unequally compensated. The focus should be on the candidate’s ability to perform the job duties assigned.

Additionally, when setting up compensation tables and budget for a position, the focus should be on the job description – not the title. There are plenty of individuals in positions outperforming “higher titled” jobs and getting paid less. This is another unfortunate problem that needs addressed.

The suggestion is to look at your pre-hiring practices. Do you ask the candidates or applicants about their salary history? Do you request this information when performing a background check? Best practice is to eliminate these inquiries altogether, following what other organizations are already incorporating. There are ways to gauge if an employee is going to fall within the range you’ve set for a position by asking what their expectations are.