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Why I was wrong about employers asking for salary information

Salary history should probably be treated as irrelevant and confidential
Compensation, diversity
Asking for salary history can perpetuate the gender pay gap. Shutterstock

By Brian Kreissl

Sometimes we change our minds — especially when things change or we are exposed to convincing evidence that suggests our previous views have become untenable. We should all be able to admit when we were wrong and be open to changing our minds when new facts or arguments come to light.

Nearly five years ago, I wrote a post arguing employers are within their rights to ask for a candidate’s current salary or even her salary history. It was likely one of my most controversial posts ever. Not only did it result in quite a few critical comments on my blog, but I also received some negative feedback elsewhere on other forums.

While I suspect much of the flak I received came from non-HR practitioners (and the primary audience for my blog consists of human resources and other workforce professionals), I believe recruitment practices have changed somewhat since I last worked as a recruiter nearly 15 years ago.

It certainly appears that fewer employers these days — at least in Canada — still ask for an applicant’s current salary or salary history during the recruitment process. HR practitioners and career counselors are increasingly pushing back against this practice, and a growing number of candidates are taking the view that their salary history is confidential and immaterial to the selection process.

I had argued that requesting an applicant’s current or most recent compensation can help an organization assess that person’s level of skill, expertise and experience. Because job titles are notoriously inconsistent and frequently inflated and people regularly embellish their accomplishments in their resumés, it can be difficult to tell if someone calling himself a director really is a director.

I also argued that salary history is a good way to determine career progression and performance — particularly in an organization with a pay for performance culture. The idea is someone who is receiving regular and significant salary increases is more likely to be at least a solid performer, if not an exceptional one.

In addition, I pointed out that someone who was previously earning considerably more than the job he is applying for is likely to be a flight risk. While that person may be willing to take the job at the salary being offered, he is likely to leave as soon as a better paid suitable position becomes available.

However, I also softened this in a subsequent post by pointing out that salary history is practically meaningless for some types of candidates such as recent graduates, career changers and newcomers to Canada. By that point, I had already started to change my mind about asking candidates for their current salary information generally.

Perpetuating the gender pay gap

The nail in the coffin came the other day when I read an online article on the Canadian HR Reporter website about New York City becoming the first U.S. city to ban employers from asking about candidates’ salary history. While New York City may be the first city to institute such a ban, similar legislation was recently passed in California.

This type of legislation seems particularly important in the United States, where some employers even demand that candidates produce previous W2s (the U.S. equivalent of a T4) during the selection process.

The reasoning behind the ban is that asking for salary history can perpetuate the gender pay gap. This makes sense because if women are underpaid relative to men, then asking for current compensation information or salary history would tend to reinforce that gap and make it more difficult for them to catch up.

Pay for the current job, not previous ones

The basic argument in all of this is people should be paid for the job they are doing. In many ways, previous salary is irrelevant because an employer is paying their employees for their current jobs, not their previous jobs with previous employers.

Recruitment best practices dictate that it is best to ask candidates about their salary requirements for a role. It is necessary to ensure the candidate and the employer are on the same page and aren’t wasting each others’ time.

However, I am now leaning much more towards agreeing with people who argue that salary history is largely irrelevant and basically none of an employer’s business. Recruiters need to find other ways to probe and assess a candidate’s background and fit for the role.

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

Brian Kreissl

Brian Kreissl is the product development manager for Thomson Reuters Legal Canada's human resources, OH&S, payroll and records retention products and solutions.
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