Asking Applicants About Salary: What to Know

November 6, 2017 Christine Hendrickson, Seyfarth Shaw LLP

“What is your current salary?” is a question familiar to all job seekers and many employers. 

If you are an employer asking this question of candidates on your job application or during interviews, you may need to revisit your processes in light of the new compensation history bans popping up across the country. 

What Do the Salary History Ban Laws Prohibit?
A growing number of states and local jurisdictions have enacted laws that will prohibit employers from requesting salary history of job applicants and limit an employer’s ability to consider prior salary when making offers to new hires. Currently, eight jurisdictions have enacted bans impacting private employers: California (effective 1/2018), Delaware (effective 12/2017), Massachusetts (effective 7/2018), New York City (effective 10/2017), Philadelphia (stayed pending legal challenge), Oregon (rolling implementation beginning 10/2017) and San Francisco (7/2018). Similar laws are currently or have recently been under consideration by many other jurisdictions, including in Illinois and Texas. 

While each law is different, at their core, these laws will prohibit employers from asking a job seeker’s prior or current compensation, benefits or wages during the application or interview process. Most also prohibit relying on prior salary information when deciding whether to offer a job or how much to pay. 

What Can Employers Do?
Employers can still ask candidates about their compensation expectations. It’s OK for employers to ask, “What are your expectations with respect to base salary, bonus or benefits?”, “What is your desired compensation?” or “What would it take for you to leave your current employer?” Framing the conversation around compensation expectations is a safe way for employers to understand what the candidate is looking for and to ensure there is a match with the pay for the position.

But what if the candidate tells an employer their prior salary? This is a gray area. In many jurisdictions, if a job seeker discloses compensation history information “voluntarily and without prompting,” the law will not prohibit the employer from relying upon the volunteered information in setting the applicant’s starting salary.

But proceed with caution. The Delaware and Oregon laws do not have carve-outs even if the information is provided voluntarily, and some states, such as California and Massachusetts, caution employers not to rely on prior salary alone to justify any disparity in pay.

What is CareerBuilder Doing?
CareerBuilder has taken steps to remove this question during the registration process, and no individual candidate’s compensation history will be provided to CareerBuilder employers or clients (i.e. Jessica Smith’s current salary is $XX,XXX).  

CareerBuilder may still ask job seekers about their desired compensation. In addition, CareerBuilder may ask about compensation history for market survey purposes. Job seekers are informed that sharing their compensation history is voluntary, and that the information will only be used in aggregated form for employers to know the market rates. 

Please note: This article was prepared by Seyfarth Shaw LLP for informational purposes only and is not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship of any kind. Reader should not act upon this information without seeking professional legal counsel.

Christine Hendrickson is senior counsel in the Chicago office of Seyfarth Shaw LLP, where she serves as the Co-Chair of Seyfarth’s Pay Equity Group and a core member of the firm’s Labor & Employment OFCCP, Affirmative Action & Diversity Consulting Team. 

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