At a job interview, a candidate is often asked: “What’s your current or most recent salary?” Usually, this question is feared. After all, a low figure could limit the candidate’s starting pay, but a high number could make the candidate seem expensive. Now, in a growing number of states and cities, the question is off limits, as employers face legislation that bars them from asking job candidates about their salary history or benefits.
Proponents of the new legislation argue that banning the salary question is necessary to ensure pay equity for women. The argument is that by basing future salaries on previous wages, employers have been perpetuating the earnings divide. In other words, because employers have historically relied heavily on salary history, the gender pay gap has widened as women age. Proponents of the new legislation argue that employers should price the position (as opposed to the person).
Some companies, however, say the new laws represent another intrusion into their businesses and that there is nothing wrong with using salary history to set pay and manage their costs. According to these companies, the laws are improperly dictating how they must conduct their businesses. Further, the companies claim that if they underpay employees, they are at risk of losing them to competitors—and there is no evidence that the legislation promotes wage equality.
Legislation was passed last month in New York City. Similar legislation was passed last year in Massachusetts. The City of Philadelphia, Pennsylvania, passed a similar law that was set to take effect later this month; however, the constitutionality of Philadelphia’s ban was challenged when the Chamber of Commerce of Greater Philadelphia filed a lawsuit in federal court claiming the ban deprived businesses of their First Amendment rights. The implementation of the Philadelphia law has been temporarily stayed until a federal judge rules on its constitutionality. Currently, at least eight other states are considering similar measures—Illinois, Maine, Maryland, New Jersey, New York, Pennsylvania, Rhode Island and Vermont.