Salary history ban removes important hiring tool, businesses say

The salary history law aims to even the gender wage gap.
The salary history law aims to even the gender wage gap. Photo Credit: Charles Eckert

A city ban on questions about salary history during the hiring process, which went into effect Tuesday, removes an important tool employers use when looking for the right applicant, according to some business leaders.

“Historically, it’s been a benchmark to screen applicants,” said Kathryn Wylde, president and CEO of the Partnership for NYC, which represents city businesses.

Without the question of salary history, employers will have to sort through more applicants who aren’t qualified for the job, according to Mark Jaffe, president and CEO of the Greater New York Chamber of Commerce, which represents more than 30,000 businesses.

“There will be more people applying who may not even be in the ballpark at all,” he added.

The legislation, sponsored by Councilwoman Elizabeth Crowley and Public Advocate Letitia James, passed in the City Council in April. It aims to help even the wage gap between men and women, who earn about 80 percent of what men earn each year, according to Pew Research Center data, and that percentage is even lower for women of color.

“Substantial inequality still exists between women and men in the workplace — most notably, a sizable wage gap. A way out of this injustice is to enact laws that prevent an employer from basing a prospective employee’s pay based on her previous pay history,” Crowley said in a statement. “Employers must base the rate of pay on the worth of the work.”

“This law will go a long way toward ending the cycle of pay inequality. It will stop women who far too often have lower salary histories from automatically receiving lower offers,” James said at a rally celebrating the ban Tuesday.

While the chamber applauded the intention to end the gender gap, many of its members don’t agree the law is the most effective way to address discrimination, Jaffe said. Instead, women should report when they feel they are being discriminated against and if their past salary reflects discrimination, that should be discussed in the hiring process, he suggested.

Employers “don’t aim to discriminate,” Jaffe said. “They want to make the hiring process efficient.”

Many businesses have already moved away from asking about past salaries, according to Frank Kerbein, the director of the Center for Human Resources at the Business Council of New York State Inc.

“For a lot of businesses, the best practice is already not to rely on salary histories,” he said, adding that he doesn’t think legal business practices are the causes of the wage gap, which he said could be attributed to time away from work and other factors.

Some advocates for equal pay for women have their own concerns about the law. While they see it as the right first step, they don’t expect it to completely fix the wage gap.

“I think it’s fair to say that because we know that women get paid less, employers can offer lower salaries to women without knowing what their past salaries were,” said Brigid Lang, the executive director of the Grace Institute, a workforce development program for women.

To address that issue, Lang said the institute works to help women know what salary a position is worth and then be able to negotiate fairly based on their skills and experience. The NYC Commission on Human Rights, which will enforce the law, hopes the ban will facilitate that negotiation.

“Removing questions about applicants’ salary history will help job seekers who have been underpaid for too long to negotiate a salary based on their skills and qualifications rather than their past salaries,” CCHR Commissioner Carmelyn P. Malalis said in a statement.

The commission launched a campaign to help job seekers understand their rights, as well as educate businesses, especially those that may not have Human Resource departments to help them understand the law.

Here are a few things you should know about the law:

Does it apply to all job interviews?

The law applies to all job interviews except those for internal transfers or promotions, or for positions which compensation is set through collective bargaining. Even if the job is not in New York City, if the conversation about the job occurs in the city, the law applies.

What should I do if I’m asked about salary history during an interview?

The CCHR recommends not answering the question. Instead, offer your salary expectations and “indicate that you’d like to discuss your compensation based on the requirements and responsibilities of the job for which you’re applying, which may differ from your prior work,” the commission says.

Applicants can also report the violation to the commission by calling 311 or 718-722-3131.

Can applicants voluntarily discuss salary history?

Yes, applicants may voluntarily tell an employer their salary history, but they can’t be prompted to do so.

What happens if an employer violates the law?

Employers could face fines of up to $250,000 and mandated trainings if they violate the law.

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