The trend of salary history bans is only going to increase. So forward-thinking companies can make changes to their own internal policies now and avoid rushing to do so when their state.
If your interview process still involves
asking questions about candidates’ previous salary history, you may want to
consider making some changes to that process.
Amazon just announced an internal ban against
asking job applicants about their previous salary history, joining other tech
giants like Facebook and Cisco.
The ban, which was posted in its entirety on BuzzFeed News, states that
hiring managers and recruiters can no longer:
“directly or indirectly ask candidates about
their current or prior base pay, bonus, equity compensation, variable pay, or
benefits.”
In addition, managers and recruiters can’t:
“use salary history information as a factor
in determining whether or not to offer employment and what compensation to
offer a candidate.”
May not be optional soon
Smaller companies may be asking, “We don’t
compete with Amazon, so why should we care what they’re doing?”
There are several
reasons why employers of all stripes should care.
For one thing, when giants such as Amazon and
Facebook make major HR-related changes, those changes often wind up becoming
trends embraced by the rest of corporate America.
Plus, soon employers may not have a say on
the matter. A number of states and cities have enacted specific laws that
prohibit salary history inquiries during the job-application process.
California, Delaware, Massachusetts, Oregon,
New York City, Philadelphia, Puerto Rico and San Francisco have such laws on
the books. Plus, Idaho, Maryland, New York, Rhode Island, Texas and Virginia
are considering similar legislation.
Why the ban is necessary
Although Amazon, which is based in Seattle
isn’t currently headquartered in a city or state that prohibits salary
inquiries, the company said it was taking a “proactive stance” on the issue and
such a move will help to close the pay gap.
Equal pay has become a huge workplace issue
in recent years, and removing salary inquiries from the hiring process has
widely been accepted as a proven way to achieve equity.
Here’s why: When a company knows how much an
applicant is currently making, it’s much easier to figure out the lowest
possible offer that hire will accept. This often results in already underpaid
women and minorities continuing to be underpaid in their new positions.
By removing prior pay history questions from
the hiring process, that cycle of underpayment should correct itself,
proponents of these laws say.
The trend of salary history bans is only
going to increase. So forward-thinking companies can make changes to their own
internal policies now and avoid rushing to do so when their state and/or city
requires them to do so.