If you are like most employers, you probably routinely ask potential employees for their salary histories. You may even require applicants to state their salary expectations up front in the cover letter. But it may be time to rethink the practice. Here’s why:
Asking applicants about their salary histories may perpetuate pay discrimination, particularly against women.
That’s one reason the federal Office of Personnel(OPM) recently told all federal agencies not to rely on past salaries to determine how much to offer new hires. OPM says that women re-entering the workforce after taking time off to have children may be at a pay disadvantage. The resulting employment gap means past salaries may be lower than those of men with identical skills and qualifications who did not put their careers on hold.
And that raises the risk of a sex discrimination lawsuit.
Adopting the OPM approach makes sense for several reasons. First, salary history isn’t as important as overall experience and education.
Using salary histories as a way to gauge what you should offer new hires can backfire into a lawsuit if the applicant finds out that men with similar qualifications are making significantly more. In that case, your questions on past salary, particularly when coupled with a low-ball offer, may land you in court.
Second, simply telling the applicant the salary range of the position for which she is applying, rather than obtaining a detailed salary history, means you won’t inadvertently end up discussing childbearing or childrearing—topics that can lead to charges of discrimination based on sex or familial status.
Finally, you may find that asking for a salary history discourages some applicants from even applying. Or it could encourage candidates to inflate past compensation, knowing that it’s almost impossible for you to check that information.
Advice: Analyze the education, skills and experience required for every job you post. Then, if possible, try to determine what other local employers pay for similar work.
Use all that information to set a fair compensation amount that you can afford, and that will attract candidates of the quality you need. That’s a sound and legally defensible basis for.