The Legal Lounge: 4 Reasons to Ask About Salary History — and Why They Are Wrong

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Apr 30, 2020
This article is part of a series called The Legal Lounge.

Over the past few years, an increasing number of states (17 to date) and localities have banned employers from asking candidates about their salary histories. The Ninth Circuit Court of Appeals has even held that salary history can never be “a factor other than sex” under the Equal Pay Act — which is currently making headlines given that the Society for Human Resource Management (SHRM) recently expressed a desire to overturn that decision.

And SHRM is not alone in balking at such bans — it’s even been suggested that employers would choose not to do business in jurisdictions over this prohibition. That’s huey. 

Here are four of the most popular reasons recruiters often cite in favor of asking about past pay — and why they are wrong.

1. “The candidate’s salary history tells me about the level of responsibility the person has had.”

You can’t tell that from their resume, LinkedIn profile, or interview? Isn’t the interview designed to have candidates explain their experience level and what they bring to the table? They’ll tell you if they’ve had staff, managed big projects, or have the necessary technical knowledge. Their salary won’t tell you that. If you’re only using past compensation as a barometer of truth, isn’t that a bit shady? 

2. “I don’t know if my company will be able to afford the candidate unless I ask about salary history.”

Yes, you can expect that a candidate wants to earn more in a new job. But you could always ask what the candidate’s salary expectation is, and then you’ll learn if you can afford the individual. If the candidate won’t take the job because the salary is too low, you’ll figure that out at some point. Could it mean that you have to go back to square one? Maybe, but there are stupider reasons reqs don’t close.

More importantly, a candidate’s current salary doesn’t determine the value the employer places on the work the candidate will perform. Your organization determines the value, not the candidate’s previous employers. You set value by reviewing market rates, what you can afford, and what other employees make within the organization. Why would you let a candidate’s current or prior employer play a heavy role in that determination?

3. “I won’t know if the candidate is ambitious without knowing that the individual has been promoted over time or received wage increases.” 

Excuse me? The candidate has applied for a job with you. You have the person’s application and/or resume, which will show whether the person is ambitious or has been promoted. What are numbers going to tell you that these information sources won’t? Plus, you don’t always need the most ambitious candidates. Sometimes, you need people who can do the job.

4. “For sales roles, to determine if someone really closed big deals, I need to see the person’s W2.”

A W2? You’re going to ask for a Social Security number and a tax document as a condition of hiring someone? That’s a lot of private information for which you are now responsible. Sure, some sales information might be proprietary to a former employer, but a W2 doesn’t show any big sales. It shows an aggregation over a year. It doesn’t tell you when sales closed or when the money actually hit, so it could be misleading and incomplete information, at best. 

Besides, you’re already likely asking the candidate to explain sales experience and how the person went about securing big deals in the interview or even during the initial screening. If someone can’t answer these questions, that’s the reason not to hire the individual, not an unwillingness to give a stranger their Social Security number or W2. 

The wage gap is real for women, and it’s especially significant when you factor in race and ethnicity. I don’t know any recruiters — even those wedded to salary history questions — who want this disparity to continue. That’s why you’re far better off asking during a screening not about salary history but about salary expectations. 

Click here for more Legal Lounge columns.

This article is part of a series called The Legal Lounge.
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