Despite ban trend, most employers still use salary history to set pay
- Nearly half the employers in a new WorldatWork study found "salary history bans" simple to carry out. The Quick Survey on Salary History Bans (U.S.) shows that 44% of employers surveyed said the ban on asking job candidates about their salary histories was "very easy" or "extremely easy" to implement. Just 1% found the ban "extremely difficult" to adopt, and 8% found adopting a ban "very difficult." The need for salary history information decreases when employers have access to pay ranges and reliable compensation data, said Sue Holloway, the group's director of executive compensation strategy, in a statement.
- But on the flip side, 84% of employers say they rely on salary histories to evaluate a candidate’s pay expectations compared with internal pay levels, and 80% of employers use salary histories to determine what offer a candidate will find acceptable.
- Some employers have opted to be proactive; 37% of employers across the U.S. have stopped asking for salary history, whether or not state or local laws apply. But salary history data still might be used to determine pay for internal candidates who are being considered for a move within an organization, says WorldatWork. According to the survey, 73% of employers don't ban salary histories when setting pay rates for employees in new positions.
States and localities across the country are adopting salary history bans, increasing the pressure on workplaces already dealing with a patchwork of laws. Even if removing the question from the hiring process proves simple, many of these laws have additional requirements. (Our salary history ban tracker is here.) At the Society for Human Resource Management's employment law and legislative conference this year, at least one session noted that employers may want to stop asking about salary history altogether. Some companies, including Amazon and Progressive, have already banned the practice at their workplaces.
WorldatWork says employers will need to make a strong change-management shift to carry out a salary history ban. For many, this process may begin with an internal audit, which attorneys suggest be completed with counsel to maintain privilege. Some companies have opted to make their pay scheme transparent (implementing pay bands or the like) to make fairness more obvious.
Despite the massive undertaking, a shift in compensation practices may well be preferable to litigation, as courts begin to weigh whether setting pay based on salary history can amount to discrimination — even without bans in place.