Previous Compensation – Is it Still Relevant in Hiring?
Is asking about previous compensation a to-do or not-to-do? The question is a loaded one for employers who want to stay up-to-date on current state employment practices and candidates who may be wondering if the question is still a valid one. The answer for both parties often lies in what state the hiring is taking place or the location of the parent company.
In January, Bank of America (BOA) made the announcement BOA hiring managers can no longer ask compensation information from candidates as of March 2018. The change accompanies a response to a shareholder proposal. Bank of America stated removal of prior compensation questions is one way the company is looking to amend the ongoing issue of the gender pay gap, according to an article in The Washington Post.
In a similar vein, Starbucks made public its achievement of 100 percent pay equity for men and women in the U.S. last month. Next up, the company plans to apply its gender pay equity success to its locations around the world, according to a CNBC article. A spokesperson for the company shared this milestone is the result of many years of work and the creation of tools that do not include asking candidates about salary history.
Defining the Line
Depending on the law’s jurisdiction, employers cannot ask about prior or current compensation during the interview process. This also includes employment benefits. Employers can ask about desired compensation or the amount it would take for an employee to leave a current employer. Employment sites such as CareerBuilder continue to ask about desired compensation, but such sharing is considered voluntary for those using the site.
Current Salary History Bans
California – effective Jan. 2018
Delaware – effective Dec. 2017
Massachusetts – effective July 2018
New York City – effective Oct. 2017
Oregon – effective Oct. 2017, rolling implementation
Philadelphia – effective Nov. 2017
San Francisco – effective July 2018
For employers hiring in states without salary history legislation, the legality of asking the salary question remains murky. Candidates can confirm state policies with the Wage and Hour Division of the U.S. Department of Labor.
If salary is requested, candidates have the option to respond with a pay range. Online salary surveys can assist candidates in determining the average salary of that or a similar position. Salary calculators help factor in cost-of-living regarding a geographic location. Lastly, candidates should always consider compensation as salary plus other benefits such as vacation and sick days, PTO, health insurance, tuition reimbursement and other associated perks.
Knowing the numbers can also help align the expectations of a jobseeker with the company’s pay range. Knowing both parties are on the same page is instrumental in decreasing unnecessary turnover and job hopping.
This article is brought to you by Staffing Kansas City. A full-service employment agency that provides contract-to-hire, direct hire and contract employment placement services in the Overland Park, Johnson County, and Kansas City Metro areas.