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Massachusetts Loses Mind: Passes Law Outlawing Employers Asking For Salary History...

Massachusetts has lost its mind.  In a prime example of lawmakers not understanding business, the state has outlawed employers from asking interviewees about their salary history.  Here's a quick rundown from Forbes:

"Massachusetts has just passed the most comprehensive law regarding the subject of equal pay. Equal_pay

"The law was signed by Republican Governor Charlie Baker on Monday, making Massachusetts the first state to pass a law that prohibits employers from asking interviewees about their salary history, keeping them from basing someone’s pay on what they previously made, though anyone can volunteer that information if they so choose.

Think Progress writes that proponents of the law argue that the practice of requiring potential hires to divulge their earlier salaries places women in a cycle of low pay—if a female worker made less than her male counterpart at her last job, she’s more likely to make less in her next role as well.

The bill also prohibits companies from penalizing employees who discuss their salaries with their peers, or “salary secrecy,” a practice that has been outlawed in California and New York as well. Additionally, it requires that both men and women be paid equally for “comparable” work, a provision that was also included in the California law."

Before you slay me for being anti-pay equity, stop.    California and New York have laws that address pay equity on the books, which I support.  What they don't have is over-reaching laws that hurts companies from making matches.

Here's a laundry list of bad things that can happen to businesses (and candidates!) if our recruiters can't talk salary history:

  1. We can waste everyone's time, investing a lot of cycles in the interview process and then come with an offer that doesn't meet the candidate's expectations. That can happen with experienced and inexperienced candidates from both genders.
  2. We'll do less exploratory interviews with candidates who might be "stretch" candidates based on their experience.  If we can't understand their comp for limited experience, we're less likely to invest the time.
  3. Companies and recruiters who aren't great negotiators will become even less skilled in the practice of making correct matches.

That last one should scare you as an HR or recruiting leader.

I'm pro-equal pay.  Let the legal action fly for people who have been wronged in this manner in true "apple to apple" comparisons.

But you're going to limit my recruiter's ability to ask what someone makes?  Lame.  

What should you do if you face this law?  You've got to work around it, which means your recruiters have to assess the resume, understand what their client can pay, then use what I call "salary framing", which as a negotiation technique looks like this:

“Hey Sally, based on where you’re at in your career, if you end up being the right candidate for this job, the offer’s likely to come in somewhere in the 70-75K range.  If we get to the end of the process, will that type of offer work for you?”

You didn't ask her for her salary, but you're getting her reaction to what you can pay.  That's the right way to deal with this type of law.

Remember people - I'm PRO EQUAL PAY.  But I'm anti-stupid law.  There's a difference.

Comments

BethRA

There's nothing in you list of "bad things that can happen" that you can't avoid by simply being up-front about your salary range.

Asking about salary history perpetuates the pay inequality you say you oppose - something that should be obvious given that you intend to use an existing inequality to assess candidates and decide how to negotiate with them.

If the point of the law it to force employers to change discriminatory practices, and it does that, I'm not sure that makes it a "stupid law."

KD

Hey Beth -

Thanks for reading - I took the time to go through the comparables at our company from a gender perspective, and I feel great.

That said, we're a recruiting company and I know how important this is for us to meet our clients needs. It's an unnecessary part of the legal approach to this issue. I stand behind what I said and feel like most who disagree with the approach aren't active recruiters in the same mode we have to be in our company...

KD

BethRA

Fair enough, and no, most people aren't recruiters. But the law isn't meant to address a specific company, or a specific niche in a specific industry.

Wanting to eliminate pay inequity is great, but hard to do unless we also dismantle mechanisms that help perpetuate it.

Rory Trotter

Thanks for this, Kris.

That said, I've got to push on this one a little.

As Beth pointed out, an employer that discloses their ranges eliminates all of this issues you outlined in your post.

Working as an outside services recruiter is a little harder since you need to only be putting candidates in front of an employer that are within the range you send them, but can't you just capture that when you intake the candidate (e.g. what do you need to make to leave your current role)?

^If the candidate cites something that is 40% higher than they currently make and that isn't realistic, you assess that bases on their resume and the intake convo. If it is 40% higher than what they are making, only now as a recruiter you don't know it and an employer is willing to pay what is the downside?

...As an HR pro I will always balance the need for internal equity with the need to keep headcount costs low for my employer (and I acknowledge there is a give and take here). But requiring a candidate to disclose range while not disclosing position range on the employer side has long been a competitive advantage for the employer that has led to poor negotiators (male and female) being underpaid relative to market. This change does nothing but even that playing field as far as I can tell.

Best,

Rory

Kimberlee, Esq

Yeah, to follow what others have said, I don't think this is a stupid law at all, in that it forces companies to ask the question they SHOULD be asking, if they don't want to put their own range in job descriptions (which they should generally do, but that's a whole nother battle): what range are you looking for for your next position?

It's the more important question, as salary history doesn't tell you much about a candidate's salary needs. But it's the candidate's needs that inform whether they'll take the offer, not what they've happened to make before at a totally different job at a different company.

the gold digger

We can waste everyone's time, investing a lot of cycles in the interview process and then come with an offer that doesn't meet the candidate's expectations.

Or you could just start the process by saying, "This job pays $50K. Shall we continue talking?"

the gold digger

I tried to italicize the quotation but it didn't work.

SoCalTech

Or, How about a company do their job and decide on what salary range is good for a position. You do not need to know if a candidate made 70k at his job to know that this job will be paying 80-90k.

The only real reason to ask for past salary is to attempt to low ball someone.

You can tell if an employee is not up to the task by the resume and the interviews.

KD

I love all of you who read this blog - Thank you!

But you've lost your minds to think the only reason we want to ask for salary is so we can lowball someone.

Say you have 3 candidates with different sets of experience, and different ability to impact the business. Assume for now - and I know it's hard for a lot of you - that protected class has nothing to do with it.

Knowing the salary it's going to take to land each of those candidates means opportunity for a candidate. Let's say you're an up and comer and there's some things we like, but you don't have all the things we need. you needing 70K instead of 95K can make a difference in you getting the job. And no, you won't add the same value that the more experienced candidate will in most circumstances.

For a recruiter worth their salt who has to plow through the market, having salary info isn't about screwing someone. It's about making the best match possible.

KD

Jaybe

KD, knowing their salary history does not give any sort of accurate or reliable indicator of their value. It makes the incredibly naive and false assumption that previous employers did everything in their power to keep the persons salary in sync with market data. I'm afraid you may have too many seasoned employees as readers to believe that a company stops everything they are doing to give more money to a deserving person as roles expand and/or skills increase. It's the company's job to interview the candidate and assess their value based in what they need. If a company can't make a judgement based on the value of a skillset relative to their need, they have very serious problems.

J

Well, as someone who lives in MA, I find this to be a relief. My spouse carries our insurance. We have HMO Blue and Delta Dental. Her current company pays the lion share of this (very rare), and for our entire family we pay $12 a week for medical and dental insurance combined. She does feel that she is making a little below market, but with this benefit, things fall in line. The fear of finding another position is that she would be lowballed based on salary. Explaining the situation would make her look money driven and less concerned about the job. At my job it would cost the family about $7500 a year for both medical and dental. At hers - $624.
Organizations should be required to disclose their range at the beginning of the process, so neither party wastes eachother's time. I don't see how this new law hurts anyone.

J

Also, just wanted to add that I'm not one to jump from job to job, but I am saavy enough to know that after working 9 years for the same company that they were on the freinds and family discount plan. Some of us just get comfortable staying. I gave myself a $22k increase by leaving 6.5 years ago, and have been a bulldog here internally since then and I'm up 53.5k since then. The true problem is that people get comfortable or they don't advocate for themselves. Women do less of this. If you work for someone else and just keep your head down an work hard all your life, you will never get anywhere! I think this is what that law is trying to remedy. Historically you had to be aggressive and the squeeky wheel. Took me a long time to learn that. I'm sure there were people out there that would have loved to lowball me as well, but I did not allow that.

Leigh

Where do you land on the current (low) salary being requested as part of the background AFTER the (higher) formal verbal offer has been made by both a hiring manager and HR and accepted? This just happened, and the offer was frozen by a higher up in HR who deemed the candidate not worthy of the offer, regardless of skills, experience, and sailing through seven interviews.

KD

Hi Leigh -

That's a great question - I'm 100% in favor of the background stuff not asking for current salary. I believe it should be market based and my definition of market based doesn't include that - if the employers can't engage and figure it out via dialog with the candidate, they shouldn't benefit from this weak angle...

thanks - KD

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