Salary History: A Thing of the Past?
Starting last week, state agencies in New Jersey can no longer ask job candidates about their salary history, joining a growing chorus of jurisdictions shifting their hiring processes in an effort to close the gender pay gap.
As his first official action after taking the oath of office, N.J. Gov. Phil Murphy (D) issued an executive order Jan. 16 banning the practice, which went into effect Feb. 1.
“Here and now we begin the process of bulldozing the roadblocks that have kept women from being paid fairly, that have kept many women of color from fulfilling their dreams of entering the middle class and that have allowed our wage gap to persist,” Murphy said in a statement.
According to Murphy’s office, women in the Garden State earn 82 cents for every dollar earned by men, statistics that are about on par with the national average—and even more disparate for women of color. The thinking behind salary-history bans is that women and other workers at risk for wage discrimination will continue to be stuck in a cycle of pay inequality if prospective employers base salary offers on their current or previous salaries.
“It’s hard to de-bias minds, it’s more possible to de-bias processes,” says Andrea Johnson, senior counsel for state policy at National Women’s Law Center, which has advocated for legislation to ban salary-history questions. “This is a part of the hiring process that is forcing people to carry pay discrimination with them. We need to fight the wage gap on all fronts, and this is a way to do that.”
The movement to prohibit wage-history questions began taking off in the last few years.
Massachusetts paved the way with its Pay Equity Act of 2016, which doesn’t go into effect until this summer and applies to candidates in public and private sectors. In the last year, similar measures have gone into effect in California, Delaware, Oregon and Puerto Rico. Last year, Philadelphia became the first city to adopt a wage-history ban for employers within its jurisdiction; however, a legal challenge from that city’s chamber of commerce halted that measure. In the last few months, Pittsburgh, New York City, Albany County in New York and San Francisco followed suit.
Bills have also been proposed in about a dozen other states. A broader ban could also be coming to New Jersey, as Murphy urged lawmakers to adopt legislation to ban salary-history requests by all employers statewide—similar to a bill his predecessor, Chris Christie (R), vetoed last summer.
“I think we’ll have a few more states pass laws this year,” Johnson says. “[The issue] crosses the political spectrum, and this is a simple fix that can make a big difference.”
The movement is also a way for governments and employers to be proactive in addressing workplace discrimination, an area that often generates reactive responses, Johnson notes.
HR leaders—even those in jurisdictions that have not banned salary-history inquires—can use the momentum to revamp hiring practices that could be marginalizing some candidates.
“Even a question like, ‘What is your desired salary?’ can have some impacts based on gender because research shows women to ask for less,” Johnson notes. “It’s important instead for employers to provide a salary range. Employers budget for the position and know roughly what they’re able to pay so providing that information helps level the negotiating playing field.”