November 14, 2017
Throughout the recruiting process, there are countless questions aimed towards finding out whether job candidates will be a fit for the company. A common topic recruiters and employers bring up when vetting jobseekers is salary. While this may have been the norm in the past, asking about previous pay history is now banned in certain locations. The reasoning for this ban is to make efforts to close the pay gap between men and women, and to encourage basing pay upon skills and qualifications instead of previous salary, according to NYC Commission on Human Rights. A recent Hunt Scanlon article covered how bans on compensation history questions could change the way recruiting firms do business, and how employers recruit talent. Here is what you need to know as a recruiter, employer, or jobseeker about salary history questions where the laws are in effect.
What you CAN’T do under the new laws:
- You can’t ask a prospective candidate what they are currently earning at a job.
- You can’t use the candidate’s previous pay to determine an offer if you stumble across it on accident.
What you CAN do:
- If the candidate offers salary history without prompting and voluntarily, it can be considered.
- You can ask about a candidate’s salary expectations, as opposed to what they made prior.
What happens if you break the rules:
- In NYC, you can be fined anywhere from $125 to $250,000, according to a Labor Sphere article.
Where you are restricted from asking about salary, based on a recent article by Business Insider:
- The ban covers private and public employers from asking a candidate’s pay history, set to take effect in January 2018.
- All employers are banned, taking effect in December 2017.
- All employers are banned, taking effect in July 2018.
- New Orleans
- The ban is currently in effect just for city departments and employees of contractors working for the city.
- New York City
- Public and private employers are banned from asking pay history questions, effective now.
- The law banning all employers from salary questions goes into effect January 2019.
- The ban was set to take effect in May, 2017 for all employers, however, a temporary halt has been placed on it.
- City agencies are banned from the inquiry, effective now.
- Puerto Rico
- All employers are restricted from inquiring about candidate’s pay history, going into effect March 2018
It is important for all parties involved in any recruiting process to be aware of these new and upcoming bans on salary history questions.
As a national executive search firm, Direct Recruiters, Inc. (DRI) stays current on these laws around the country. If you have any questions about this, please contact us for a conversation.