Keeping salary history off job applications could help workers earn more

It starts like this: a young woman graduates from college and earns approximately $4 an hour less than a young college man, according to a national study by the liberal-leaning Economic Policy Institute think tank.

Then, when that woman goes for her next job, the employer asks a simple question: How much did you used to earn? The new salary is then based on the old, and the average wage gap between the genders tends to continue.

Factors like job choice, experience, and discrimination can contribute to this gap over time, but multiple studies and analyses of U.S. Census data in recent years have found a persistent salary differential between men and women doing comparable jobs. In New York State, this has resulted in women earning 89 cents on the dollar for full-time work, with black and Hispanic women earning even less: 66 and 56 cents, respectively, for every dollar earned by a white man, according to census data analyzed this year by the National Partnership for Women and Families.

A number of measures have been introduced in NYC to bridge the gap, including a law signed by Mayor Bill de Blasio on Thursday that bans employers from asking job applicants about past salaries.

The law, introduced by Public Advocate Letitia James, follows on an executive order from the mayor last year that did much the same for city government jobs.

If employers can’t ask you what you made the last time around, goes the argument, they’ll have to base their hiring decisions more on quality of the applicant than the easy glance to the right of the dollar sign — relying on a figure, in other words, that may unfairly undervalue a woman due to past history. In that scenario, the free market may be undervaluing that woman’s work, which might be great for the company’s bottom line, but not so good for her.

Making disclosure a choice

The law allows applicants to divulge their past earnings voluntarily. Compromises like that, as well as support from some even in the business community, have smoothed passage for laws like NYC’s in other parts of the country.

Massachusetts, for example, passed a similar law in 2016, signed by a Republican governor.

Another bill is being considered in Illinois. It made it through the Illinois House, where Republican Rep. Margo McDermed voted for it, noting her personal experience as an attorney for an energy company.

No such bipartisan support existed in the New York City Council, where the three Republicans voted against. (A similar bill is pending in the state legislature, introduced by a Democratic assemblywoman and member of the Independent Democratic Conference in the state senate.)

Republican voices beyond the council were negative as well. In a statement, Republican mayoral candidate and state Assemb. Nicole Malliotakis of Staten Island criticized the mayor, saying: “Small business is the engine that runs this city. Salary history is as relevant as experience when a business owner is interviewing a prospective employee.”

Supporters of the law, like Sarah Brafman of A Better Balance, an advocacy group for workers and women, say it simply mandates that companies are “wholistically evaluating” their applicants. This way, past experience doesn’t intentionally or unintentionally result in discrimination, which is illegal under equal-pay laws.

By avoiding the salary discussion, businesses also can avoid violating those laws, which for some companies has led to ligitation. Aerospace giant Boeing settled a class-action suit for $72.5 million in 2004, for instance, agreeing to make changes in hiring and promotion practices. As the Seattle Times reported, “women typically earned $1,000-$2,000 a year less than men for similar jobs, a disparity magnified over time by the company’s policy of calculating pay raises based on an employee’s salary.”

A chance to earn more

Devon Satnick is the director of sales at Betts Recruiting and works with companies to identify prospective employees who are effective salespeople in industries like computer software.

For such jobs, which often run on commission, Satnick says it’s customary for her recruiters to ask for a candidate’s base pay as well as their full earnings to see how well they’ve performed in the past. This tends to be verified late in the job application process when the candidate turns over a W-2 form.

Satnick says her firm will likely encourage candidates to volunteer their previous salaries if they want a salary bump. But she says the new law jives with “my own personal values” as a way to eliminate discrimination.

It’s not uncommon, she says, to see an employer allot a certain salary for a specific job: $60,000 or $70,000, for example. But if a candidate says he or she currently earns a $45,000 base, the company will definitely drop down to meet that figure.

With the new law, the worker may have a better chance at a higher wage.

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