Massachusetts has passed a law (signed by Gov. Charlie Baker) which for the first time would bar employers from asking job applicants about their salaries. It is designed to prevent pay disparity for women. However, it could create uncertainty on how to address a key piece of information used to gauge wage offers for employees.
The law was passed unanimously in the Massachusetts state legislature and signed by a Republican governor. It is a measure strongly supported by Hillary Clinton.
This is a major change to job interviews. The new law states in part:
(c) It shall be an unlawful practice for an employer to:
(1) require, as a condition of employment, that an employee refrain from inquiring about, discussing or disclosing information about either the employee’s own wages, including benefits or other compensation, or about any other employee’s wages;
(2) screen job applicants based on their wage, including benefits or other compensation or salary histories, including by requiring that an applicant’s prior wages, including benefits or other compensation or salary history satisfy minimum or maximum criteria; or request or require as a condition of being interviewed, or as a condition of continuing to be considered for an offer of employment, that an applicant disclose prior wages or salary history;
(3) seek the salary history of any prospective employee from any current or former employer; provided, however, that a prospective employee may provide written authorization to a prospective employer to confirm prior wages, including benefits or other compensation or salary history only after any offer of employment with compensation has been made to the prospective employee;
So it appears that the employee can disclose the information or it can be sought with authorization after an offer is made. It is not clear what will be prohibited in terms of discussion of salary when an applicant is asked about the salary that he or she expects. The law is likely to create gray areas for interviewers as to what is considered an inquiry into wages. Moreover, it could be argued that the most direct way of addressing wage disparity is to compare the actual wages as opposed to barring interview questions. Conversely, the law will force employers to offer wages at what is viewed as the market rate as opposed to individual’s expected or accepted earnings.
What do you think?
OK Mass- do something ridiculous about a problem to AVOID doing anything REAL. How about just letting employees discuss anything personal including pay rates without retaliation????
@JayS
Spot on re: salaries. “The man” is always out to pay as little as possible.
Re: the VAT – you are right that the poor suffer more in terms of purchases – however it funds schools, infrasture, medical care, etc. And the VAT does not affect food (except for alcohol & luxury imports) or pharmaceuticals.
Also Europeans DO pay income taxes in addition to the VAT.
To Olly – It has been my experience that employers use prior salary history information in order to have the upper hand in any negotiations. That is, they can guess what the least is the candidate will come for, whereas the candidate has no idea what the company might pay. And in many cases, help-wanted ads often point-blank required the info.
And I disagree with Sqeeky. I think this law will raise salary levels in general.
So I view asking for salary history as being in the same category as asking a woman if she is planning to get pregnant anytime soon. None of their business.
To Steg – The only way to have the government not know your income, yet be able to finance the government, is to go to the Value Added Tax (VAT) system used a lot in Europe. This taxes purchases rather than incomes. Downside is that the poor pay relatively more of their money in tax, compared to the wealthy. Thus it is a more regressive system.
“The person could have been underpaid or overpaid.”
(1) The person could be moving from a non-profit to private sector position. Non-profits always pay lower salaries.
(2) The person could be moving from a high-salary urban area to a rural area or to another lower cost-of-living state.
I can think of more reasons that prior salary information could be meaningless.
Why do you need a law for a prospect to decline to provide this information? If the employer wants this information to make an offer and the prospect declines to provide it then the employer must decide how valuable this person is to them based on other criteria. The prospect also has to decide if they want to work for a company that expects this information to be provided to make a hiring decision. The prospect may lose the opportunity to work for a great company and the company may lose the opportunity of hiring a great employee.
I actually think this new law is a good idea. Why should an offer be x-percent over what the person made at the last job, as opposed to what the position is worth to the new organization? I also like the idea of having all salaries posted for internal consumption. Wouldn’t even have to have names attached – just a list of salary numbers.
This is political pandering. Vote no on this piece of legislation and this will be front and center in your reelection campaign. This will do nothing to address this perceived problem. This is just another “show” law looking for a problem to solve. There will be follow up legislation somewhere down the road to address the unintended consequences of this one. Wash, rinse, repeat.
Isn’t the wage gap a myth?
I have never thought it was relevant to ask what a person made at a current or previous job, although it is certainly common. The interviewer is trying to get the best person for the company at the lowest possible price. I don’t see this as gender discrimination, but I think when new people are hired they should be payed commensurate with what current employees are paid for the same or a similar job. I know when companies are seeking to hire there is already a pay range established for the job. The pay offered should be based on skills and experience, not on what someone made at his/her last job. I agree with TIN about pay variances in different areas of the country, and it works both ways. The cost of living has to be taken into consideration, at least by the prospective employee, when evaluating a proffered salary. But I think the job offer should be made without knowing what the person previously made whether the person is male or female.
The issue of the previous salary seems like it should be an ingredient that is optional. The employer interviewing the candidate should know what he or she is prepared to pay for the work to be done. The employer would probably know the going rate as well. The marketplace will provide too many or not enough candidates. The decision would seem to depend on the abilities and demeanor of the candidate. A candidate flouting a previous salary or an employer using it to nickel and dime a candidate should be left up to the ‘art of the deal’ part of the event.
However in this employer/worker climate and given the disparity of wages based on gender, a law like this should be joined by others to equal the playing field. There is nothing to be gained by screwing the worker except more returns on investment at the top. There would be no returns on investment at the top or anywhere else if there were no workers. Taken one step further, honesty, equality, and an appropriate return on the investment of the worker will always make more money for everyone. This is proven constantly.
issac – having hired and supervised employees, I can tell you they are all individuals who work at different rates with different talents and skill sets. Some work their ass off, some coast and do the minimum. Who should I give the raise to?
I was totally against this- then I thought of something!
We can extend this general practice of ‘You can’t know what I made!’ to TAX SEASON!
Oh what’s that Mr. Tax man? How much did I make last FY? WELL THAT’S NONNA U BIDZNESS!!! I’ll Tell you what I THINK my taxes ought to be!
—–
Seriously though- the government really should not be doing this type of stuff. IF’N the people don’t like the companies questions, they are free and unchained to seek employment at a different company. Perhaps they are able to do their own cost-benefit analysis to see if they are willing to subject to terms of employment for the monetary or equivalent incentive.
OH wait, that’s too much onus on the individual, isn’t it? THINKING IZ HURD. (oh no I’m becoming Barkin’ Dog!)
—-
I agree with a lot of roadrider- I have consciously taken an entry level job for the main reason of learning new skills in a different industry. I work below minimum wage- directly contracted with my employer. I thought the deal was good (essentially being PAID while being TRAINED- unheard of in many places), so I took it. A choice made as an individual. I made a lot more self employed at my old job! I also did a lot less physical labor. I needed a good workout, though. Now, I don’t need to pay to join a gym, I’m being paid to work out and learn, and I still have some fun self-employment opportunities.
Any time the government tries to one-size-fits-all anything people are going to get crushed financially, emotionally, spiritually, sometimes physically (loosies on the corner!).
They ought to stick to contract enforcement and dispute settlement.
I think what is needed is transparency. When I was in the Navy the supply officer would just dump the Monthly LES on the table in the wardroom and everyone would just shuffle through to get theirs. But it really didn’t matter because everyone could calculate pretty close what everyone got. Do the same at a company. Post everyone’s salary. It won’t take long for Julie to ask why she doesn’t make the same as Kevin for the same position. A person could just ask for a de-identified list of salary for a given position with years experience/basic(years) ed level (BS/BA, Masters, Doctorate). This type of law would not be smell as much of social engineering and puts the emphasis on each person to decide if it is worth it to them. Maybe someone would take a lower paid job for better working conditions/benefits or to get some experience they wanted.
Some how I think that this well meaning socio/economic engineering will turn around and bite us in the ass. I see more women in professions and careers. I see more women running and owning businesses. I think we should just let nature run it’s course.
Someone provide the reasoning offered by the legislators and governor.
When Donald Trump is President this won’t be a problem. He knows what everyone is worth, so we can make it illegal to ask job applicants whether they have the skills needed for the job. Trump can just set all salaries for everyone, because he knows what you should be paid. Unless you work for Roger Ailes. In which case Mr. Trump will expect you to find another career.
You have to wonder what is the end goal is for these pols.
Bezo has been stealing key employees from Tesla by doubling their salary. This would end that.
Tin makes a good point about the value of the dollar in different parts of the country. There is a map that will show you what a dollar is worth in any particular state. For example, a dollar is worth 60 cents in CA but you cross into AZ and it is worth $1.03. Some states are higher. Some lower. All that has to be factored in.
The salary should be based on the education and skills brought to the job, as well as the market rate salary for that industry in that particular geographic area. I don’t see how past salary is relevant. The person could have been underpaid or overpaid. Why would company B assume that Company A paid an appropriate salary, without in-depth knowledge of that company’s compensation package and policies? Salaries also vary widely based on the cost-of-living in the area, further eroding the relevance of past salary history if a person moves to another area.
I think it will result in lower wages for all, so as not to discriminate. Make the lower offer, and if the applicant rejects it, you can go you if you really want the person. This will have zippo effect on the alleged wage discrepancies between people with wee-wees and people with wussies. Because I think it is now illegal to call them male and female??? Because the wage discrepancies are an illusory thing caused by other factors.
All of this kind of crap is going to fail unless you get Trump in, and he can stop the off-shoring and the illegal immigration stampede. Because if wages get too high, it’s just “Hello Mexico!” or “Hello, Senor! You want job? uh YOU WANT-O JOB-O?”
Squeeky Fromm
Girl Reporter
i think there is no legitimate reason to ask about past salaries except to discriminate? if your knowledge and skills got you a job offer, whats the point of asking what the hell you made at your last job??