Is It Legal to Ask a New Employee for Their Salary History?

The legality of asking a new employee for their salary history varies depending on the jurisdiction. As of 2020, it is illegal in New York, but other states follow similar laws. However, several states and cities have enacted regulations against such inquiries, reflecting a growing awareness of the need for fair and equal pay opportunities.

Legal Status and Jurisdictional Differences

It's important to recognize that there are significant differences in laws across jurisdictions. While certain states and cities have prohibited the inquiry into salary history, other areas may not have such restrictions. Employers must stay informed about the specific laws in their region to avoid legal repercussions.

Many large companies have chosen to stop asking about salary histories to simplify their hiring processes and avoid potential biases. This shift in company policy is driven by a desire to promote fairness and equality in the hiring process.

Employer's Perspective and Negotiation

While it may be legal for employers to inquire about salary history, it is not advisable for them to demand or verify such information. Instead, companies can aim to understand the candidate's salary expectations to better tailor their offer. For instance, asking about budgeted salaries can provide valuable insights into the employer's earning expectations and help align the offer with the candidate's experience and qualifications.

On the flip side, job applicants may reject such inquiries, as it deprives them of their negotiation power. A more strategic approach would be to answer with a statement like, 'I promised my last/current boss not to reveal my salary. What salary have you budgeted for this position?' This response shifts the focus to the employer's expectations and provides a more equitable negotiation ground.

The Importance of Fairness and Transparency

Allowing the inquiry into salary history can lead to systemic underpayment and perpetuate salary inequality. Employers need to justify their salary offers based on market rates, industry standards, and the candidate's qualifications rather than a previous salary.

Despite the legality of the practice, it may still be a useful question from the employer's perspective. By knowing the candidate's current salary, the employer can assess their fit within the company's budget and determine if they can afford to meet their salary expectations.

Conclusion

Ultimately, the decision to inquire about salary history should be made with caution. While it may be legal in some areas, it can also lead to unfair practices and perpetuate wage gaps. Employers should explore alternative methods to ensure fair and transparent hiring processes.

For more detailed information, you can visit the following websites:

Legal Salary History Law States and Cities Take Action: Ban Asking Candidates Salary History How Do I Answer the Salary History Question?