By now, you’ve probably noticed that several states and cities have passed laws to help address the gap between genders in salary and pay. These new rules, which prohibit employers from asking prospective employees about their salary history, have HR teams scrambling to re-evaluate their hiring and interview processes. While eliminating these questions from the interview process may be a huge relief to many job seekers, it does make things complicated for hiring managers. But for employers who choose to ignore these laws altogether, it can become very costly indeed.
In New York City, for example, fines range from $125,000 for unintentionally violating the law — yes, we mean “by accident” — to $250,000 for those who willfully ignore the new rule. In Delaware, a first offense can cost you up to $5,000, and subsequent offenses can run as much as $10,000 per offense. Employers based in Oregon can be required to pay a candidate two years back pay, plus punitive damages and attorney’s fees.
The costs and penalties associated with breaking the new rules vary by market, but there are plenty of things you and your team can begin doing to ensure that you remain in compliance without limiting the effectiveness of your hiring process.
anticipate more changes.
Certain states — like California, Delaware, Massachusetts and Oregon — ban all employers from asking applicants about their salary history. To complicate things, certain cities — like New York and Philadelphia — have also taken steps to pass similar bans; in New Orleans and Pittsburgh, the ban only applies to public employers. Keep in mind that as many as 20 states are considering passing similar laws, so some HR professionals may want to prepare by eliminating salary history questions from their interview process entirely.
remember what not to do — and what to do.
The new laws can create some difficulties if you’re recruiting in one market for positions located in another market. If you or your company fall into this bucket, tread lightly. In addition to keeping track of which jurisdictions have passed or are currently passing laws, remember that salary history questions cannot be asked of applicants who live, will report to or will work in these locations, nor can they be asked on behalf of physical branch offices located in these places. If a candidate happens to volunteer their salary history information during the interviewing process, don’t engage the candidate about it, and do not consider this information when you ultimately make a hiring decision.
This doesn’t mean that salary discussions are completely off the table, of course. You can still discuss salary expectations with candidates, which means it’s perfectly fine to ask how much they’re looking for — as long as you don’t ask what they’ve made in the past or are currently making. You’re also allowed to tell them they’re asking for more than what you plan to pay, and to ask how flexible they are about their hourly rate or salary range.
While you’re no longer allowed to ask candidates about their salary history, there’s nothing wrong with giving applicants a clear salary range for the position. In fact, California requires that you provide an applicant, upon reasonable request, with a pay scale for a position. Hiring managers should be able to come up with this number by researching the market rate for a particular position that factors in experience, skills and geographic location. By setting expectations early in the process, you can pre-screen candidates by effectively discouraging anyone who would likely turn down your offer — which can speed up the process, saving you and your team valuable time.
do your research.
Get our salary guide today.
It remains to be seen what effect these laws will have in today’s fiercely competitive talent market. While the new laws will create challenges, companies can also use this as an opportunity to re-evaluate their interviewing and hiring processes and get ahead of the curve.
It’s also a great time to assess your compensation. Our 2017 Salary Guides provide a benchmark for assessing the strength of your pay rates. For more information on current salary ranges in your market, download our guide today.