Here’s What’s Wrong With the Salary History Ban

Salary history bans…is it a great idea, or a terrible one?

“What’s your current salary?” asked every recruiter since the beginning of time. But with a salary history ban, that inquiry is outlawed.

It’s true, questions about salary make candidates squirm. But employers see it as a necessity for a couple of reasons: to weed out applicants who expect more than the budget allows, to understand the market rate for specific roles and skill levels, and to bait candidates at a discount if they make less than the salary budget. A salary history ban makes these hiring processes impossible.

In a perfect world, some people are paid more than others for objective reasons. The real world doesn’t render such simplicity. Take this dilemma for a ride. A recruiter asks a female candidate about her current salary. She can answer the question and risk another low wage, or she can refuse, but a refusal comes with even bigger risks. The results of a PayScale survey of over 15,000 respondents revealed that women who choose not to disclose their salary history were paid 1.8% less than women who did. Conversely, men who refused to disclose salary were paid 1.2% more. 🤔 Doesn’t paint a salary history ban in a positive light, does it?

This isn’t really news to any of us, though. State legislators tried to resolve the gender pay disparity 55-years ago with the Equal Pay Act. Clearly, something’s still not working. The latest proposed solution, a salary history ban, doesn’t really address the issue. Here’s why…

The salary history ban: an overview

The salary history ban attempts to resolve the perpetuating gender pay disparity in the United States. The logic is this: if the wage gap is a result of gender bias, then we should prohibit the question altogether. That way, one experience of pay disparity won’t plague women for the rest of their career.

It’s important to note that the gender pay disparity isn’t just native to the States. A Glassdoor study that examined thousands of salary data from around the world discovered that the disparity rears its head in the U.K., Australia, Germany, and France. In fact, Germany, in particular, has had a similar salary history ban for decades, yet it still struggles with a similar discrepancy.

So, if we accept that this problem spans the globe; that similar laws already exist, is a salary history ban really going to make a difference? The short answer is no; one more ordinance won’t close the pay gap. Here’s why.

Everything that’s wrong with the salary history ban

The facts aren’t facts

Tons of statistics support the gender pay disparity. That’s undeniable. But how often are those headlining stats unpacked? Where’s the context? Sure, we can sift through all the studies, but ain’t nobody got time for that. I’ll do the honor and break down a critical stat for you right now.

Remember the infamous discovery that women earn 77 cents for every dollar that a man makes? You know, one of the “facts” that fueled the salary history ban? Of course, you do. Now, forget it because you’re misinformed. That pay gap is the difference between the average earnings of all men and women who work full-time. The figure doesn’t factor in variables like tenure, occupation, job, or education. If it did, we’d have a different conversation. The gap would be much less and in some cases, closed altogether.

There are way more than 50 shades of grey

The salary history ban prohibits recruiters from asking the big question. Candidates, however, can still voluntarily disclose past or current salary information. If they do, it may not be used to influence or determine pay in any capacity. If this scenario occurs and the candidate receives a lowball offer, even though that’s all the employer has in the budget… well, that just sounds like a fine line all the way to a he-said, she-said discrimination suit.

There’s even more grey area ahead. Since the salary history ban isn’t nationwide, it varies by state and locality. So far, 10 states and 8 cities jumped on the bandwagon, and it gets pretty confusing. For example, there’s a state-wide ban in New York. Cities and counties within NY piled on even more stipulations that differ from the rest of the state. It’s a lot to keep track. And what happens when third-party recruiting firms, much like Qualigence, recruit an out-of-state candidate who’s from a state that isn’t affected by the ban, for a client who is affected? Confused yet? Case in point.

with a salary history ban, Candidates miss out on opportunities

Employers lean on salary history to understand the market rate for specific roles. Candidates rely on recruiters to help them understand market rates. With a salary history ban in place, candidates can price themselves out of an offer or walk away from a dream job. Salary conversations are hard, but they create much-needed guidelines during the hiring process. The salary ban punishes everyone when it should only punish the few.

the salary history ban addresses the wrong problem

The wage gap may not be as big or as small as activists claim. It’s true that the media often omits essential details, but what’s also true is this: the wage gap does exist. Gender bias in the hiring process is real. The problem isn’t regulation; it’s people. We’re the ones in need of change.

Now that you’re more familiar with the salary history ban, check to see if your state, city, or commonwealth is impacted.

Here’s where the salary history law exists

As of July 2018, the following states and localities enforce the salary history ban. Those in violation of the law can be fined between $10,000–$250,000 per instance.

Current state- and commonwealth-wide bans

• California. Effective date: January 1, 2018
• Delaware. Effective date: December 14, 2017
• Massachusetts. Effective date: July 1, 2018
• New Jersey. Effective date: February 1, 2017
• New York. Effective date: January 9, 2017
• Oregon. Effective date: October 6, 2017
• Vermont. Effective date: July 1, 2018
• Puerto Rico. Effective date: March 8, 2017 

Current local salary history bans

• Chicago, IL. Effective date: April 10, 2018
• Louisville, KY. Effective date: May 17, 2018.
• New Orleans, LA. Effective date: January 25, 2017
• Pittsburgh, PA. Effective date: January 30, 2017
• New York City, NY. Effective date: October 31, 2017
• Albany County, NY. Effective date: December 17, 2017
• Westchester County, NY. Effective date: July 9, 2018 

Upcoming state-wide and local salary history bans

• Hawaii. Effective date: January 1, 2019
• Philadelphia, PA. Effective date: TBD

The following states ran for cover and banned the salary history ban.

• Michigan. Effective date: March 26, 2018
• Wisconsin. Effective date: April 18, 2018 

Still have questions?

We thought you might. That’s why our founder and CEO, Steve Lowisz got a comprehensive rundown of the ban through a legal lens from practicing attorney Jim Fausone. Catch the full conversation here.