The “Salary History Ban” Laws – Be Aware!

Skip Freeman, Senior Technical Recruiter, BASI Solutions, LLC (Building Automation and Smart Industry) skip.freeman@theBASrecruiter.com

As I speak with hiring managers at various controls contractors and mechanical firms, I am finding many aren’t aware of the “salary history ban” laws being enacted in cities and states across the nation and gaining momentum.  Therefore, we are interrupting our 4-part series on “Hiring Elite Controls Talent Like the ‘Big Boys’” and bringing this critical issue to the forefront.

Please note – this is not legal advice. Consult your HR team and legal counsel for specific advice.

The “salary history ban” laws are, in essence, this – it’s off-limits to ask a question about a candidate’s current or prior compensation during a conversation, interview, or on a job application. Furthermore, an employer cannot rely on prior compensation history in deciding whether to make a job offer or to set the compensation the candidate will make in the job.

While there is normally a pay range for a position, job offers have historically been based on two factors: First, “How well does the candidate interview?” And second, the candidate’s past pay. Lower wages at past jobs generally affects the candidate’s pay for future jobs which often leads to a lifetime of lower earnings. This is especially true for women and minorities.

The “salary history ban” laws are an attempt to remedy this. Whether or not one is in agreement with these laws, it is our duty to comply.

Some “dos and don’ts.”

Here are some areas to be aware of (for specifics, consult your labor attorney):

• You cannot ask in a conversation, interview, or on a job application the candidate’s current or prior compensation.
• If the candidate voluntarily gives you their compensation, consider documenting that the candidate volunteered the information and do not record the amount in order to avoid its’ misuse.
• Asking a candidate their salary expectation is most likely ok. As of this writing, I do not believe any of the laws expressly forbid this and, in fact, some of the laws expressly say this is ok.
• As a third-party recruiter, we are not allowed to ask about salary on your behalf. In fact, because the law is pending in so many states, at our own firm we no longer ask any candidate their pay history. What we do ask and pass along is what the candidate expects to be paid if they were to make a job change.
  
• How it really gets complicated - if you, as the employer, are located in a state that has not yet enacted the law, but you are speaking to a candidate in a state that has enacted the law, you could be in violation if you inquire about compensation. And, vice versa. If you, as the employer are in a state that has enacted the law and you are speaking to a candidate in a state that hasn’t enacted the law, you could still be in violation if you ask about compensation history. That’s why our firm has chosen the path of no longer asking any candidate about their compensation history. On any given day, another state may enact the law.
• The solution - what is permissible is providing consistent information to all candidates about the pay range for the job.

[an error occurred while processing this directive]The silver lining

What I have found is this – the “salary history ban” is actually making closing the deal easier for everyone, i.e., the making of a fair offer that is accepted.  

By stating up front what the pay range for the job is and allowing candidates to continue in the hiring process (or not) based on that information, there are no “surprises” at the end. The candidate isn’t going to think they can “get more” and the hiring company isn’t going to be thinking, “we can get this candidate cheaper than we thought.”

This has removed a lot of the back-and-forth in “negotiating an offer” and has removed a lot of the angst, often negative, that can be felt. Hiring companies can potentially feel they have overpaid for a candidate and, in parallel, candidates can feel they have been underpaid. Either or both of these situations casts a shadow over trust on day 1 and ultimately leads to diminished outcomes for everyone.  The “salary history ban” eliminates these negative feelings and that’s a good thing!

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Technology + Talent = Transformation. If you have the need to recruit, hire, train, and retain top talent or are looking to advance your own career in BAS, shoot us an email or give us a call and we’ll have a no-obligation exploratory conversation. [skip.freeman@theBASrecruiter.com | 678-480-4086]

About the Author

As a mechanical engineer and former U.S. Army officer, Skip is now a highly caffeinated slightly irreverent technical recruiter who’s passionate about helping companies in BAS, controls and Smart Industry recruit, hire, train, and retain top talent and helping top talent advance their careers. Skip can be reached at skip.freeman@theBASrecruiter.com