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Do Salary History Bans Work?

July 7, 2020

Recent studies have shown that prohibiting employers from asking applicants how much they earn helps establish equal wages for all workers.

Closing The Wage Gap

Salary history bans prohibit employers from asking applicants how much they earn. When employers have this information, they often use it to determine what compensation to offer new employees. However, millions of Americans, particularly women and people of certain ethnicities, are commonly paid less than people who do substantially similar work. If their salaries are based on what they earn now, they will continue to be paid unfairly.

An article in Newsweek referenced a study conducted at the Boston University School of Law. It showed salary history bans “substantially close wage gaps, increasing pay for women by eight percent and black people by 13 percent.”

Another article from reported that states with anti-discrimination laws saw salaries improved by 5% on average. It also said the increases were up to 13% for black workers and 8% for women. These higher amounts help ensure employees are treated equally and employers don’t inadvertently discriminate against members of their team.

An Increase In Anti Wage Discrimination Laws

Massachusetts was the first to pass an anti-wage discrimination law. Since then, several states have implemented similar bills. While they differ by location, the basics are the same:

• Employers may not ask about salary history.
• Upon request, employers must provide the salary range for most positions.
• People who do comparable work under comparable circumstances should receive comparable salaries.
• Exceptions can be made to accommodate travel, cost of living, seniority and other factors.

Asking About Salary Can Perpetuate Systemic Racism

Numerous studies concluded that people of certain ethnic backgrounds have traditionally earned less than others in the U.S. If people who get new jobs are compensated based on their previous salary, then the racial bias and unfair pay is allowed to continue.

According to the Newsweek article, when employers make decisions based on an applicant’s income, it: “perpetuates discrimination because low wages paid by a prejudiced or exploitative employer could be used to justify an offer of lower pay at the worker's next job. Salary histories provided a bargaining advantage to employers that would preserve past inequities.”

A research paper from the Technology and Policy Research Initiative at Boston University School of Law titled "Perpetuating Inequality: What Salary History Bans Reveal About Wages" supports this point. The study found evidence that says disallowing employers from asking candidates about their salary gave job seekers more bargaining power and better wages. This was said to particularly apply to workers who have traditionally been paid less than their counterparts.

Calls For Societal Change

In the wake of racially charged protests throughout the world, millions of people are calling for societal changes in many areas of life. Among them is the need to pay all people equally based on their job duties.

Numerous online publications have run articles about this topic recently. One in Forbes stated: “asking about a candidate’s previous compensation can perpetuate inequality, especially for black and female job seekers. Salary history bans appear to be an effective legislative tool to help eliminate this inequity.”

While several states have salary history bans, more than 30 do not. Additional laws are expected to be introduced over the next few years. Backgrounds Online will continue to provide updates here and in our State Laws section.

Best Practices

Employers everywhere are encouraged to follow a few modern hiring best practices:

• Don’t ask applicants how much they earn.
• Remove questions about arrests and convictions from job applications.
• Run comprehensive background checks after conducting an interview or making a conditional job offer.
• Take steps to create a fair workplace.

When your organization needs background checks for new and existing employees, please contact us. Our experienced team can answer your questions and help you create custom screening packages for any position. We are available to assist you Monday through Friday from 7am to 6pm PT.

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