Sometimes the question takes the form of a box asking for a job applicant’s current salary. Other times it arises in a pages-long request for salary history. And often it crops up for the first time on the verge of a job offer: “What do you make now?”
The practice of setting pay based on a worker’s past salary is pervasive across the country. Women’s rights advocates say it is a key contributor to the nation’s yawning gender pay gap because it discriminates against women who earn less than men from the start of their careers. Over time, even a small wage gap can result in significant amounts of lost income.
Now city and state lawmakers are attempting to make it more difficult for employers to use salary history in setting employee compensation.
This summer, Massachusetts became the first state to ban employers from requiring job candidates to provide salary information as a basis for future pay. Instead, employers will be required to publish salary ranges based on the skills and qualifications associated with the role.
The bill, which passed unanimously, is already being replicated across the country, part of a wave of energy around equal pay. This month, New York Mayor Bill de Blasio signed an executive order making it illegal for city agencies to require salary history in hiring.
Philadelphia and state legislatures in New Jersey and Pennsylvania also have bills pending. On the federal level, Del. Eleanor Holmes Norton (D-D.C.) sponsored similar legislation in Congress. The District has a similar bill pending that would fine employers if they ask for salary histories.
The U.S. Chamber of Commerce has not taken a position on the national legislation, and the reaction from the business community has been mixed. The Greater New York Chamber of Commerce had reservations about pending legislation before the city council that would also prohibit the use of salary history for private-sector employees.
“We and our members that we surveyed are for ending the wage gap, but we are not 100 percent convinced this would be the best way to do it,” said Mark Jaffe, president and chief executive of the Greater New York Chamber. “When you are hiring a male or female, it’s valuable information.”
The Greater Boston Chamber of Commerce backed the equal-pay law in Massachusetts after convening a mock salary negotiation process to see how it worked when salary history was removed from the conversation, said Jim Rooney, president and chief executive of the Boston Chamber.
“We listened to what some of the concerns were, and we felt like we dealt with them,” Rooney said. The law allows candidates to ask for salary expectations so employers have a starting point for negotiations.
D.C. Council member David Grosso (I-At Large) said the Massachusetts bill caught his eye because he saw how the wage gap could be perpetuated throughout a woman’s career. “It had not occurred to me,” he said.
Advocates call the approach an “innovation” in the movement for pay equality. Past efforts have centered largely on changing federal and state law to make it easier to litigate pay discrimination cases.
Focusing on salary history essentially revamps the hiring process to address a root cause of the pay gap, said Victoria A. Budson, executive director of the Women and Public Policy Program at Harvard University.
“A litigation-based approach, by definition, is only going to help the small number of people who litigate and whatever ripple effect that has,” she said.
The bill in the District has wide support, with 11 co-sponsors. A hearing is scheduled for late this month. It’s unclear whether it will come to a vote by the end of the year.
In the District, as in Massachusetts, employees could voluntarily disclose their past salary. Grosso said a sticking point will be how to enforce a salary-history ban without subjecting employers to a frenzy of litigation, a primary concern for business owners.
The Greater Washington Board of Trade is still reviewing the bill, said the group’s president and chief executive, James C. Dinegar. One question Dinegar had is whether the District would be putting itself at a competitive disadvantage with Maryland and Virginia. Neither state has passed such a law.
Women’s paychecks have become a pressing political issue as mothers have become the primary or sole breadwinner in more than 40 percent of U.S. families. Low wages for working mothers are seen as a key contributor to growing economic inequality.
Women are paid 79 cents for every dollar that men earn, according to median figures reported by the Census Bureau. The gap is wider for African American and Hispanic women.
Even when factors such as time off for motherhood, career choice and different approaches to salary negotiation are accounted for, research shows unconscious gender bias in the hiring process.
An online search platform for technology and start-up jobs, Hired, this year analyzed 100,000 job offers for 15,000 candidates at 3,000 companies and found that nearly 7 times out of 10, men received higher salary offers than women for the same job title at the same company.
Leveling the playing field when it comes to setting pay has the potential to help a wide range of candidates, women’s advocates say.
“Women, minorities. Let’s be real — it would also benefit male job candidates,” said Karen Chopra, a career counselor based in Washington. She said many people have depressed salaries coming out of the recession, and even some highly paid men late in their careers could benefit because they are concerned they are “overpriced” for many jobs.
In the absence of a law to fall back on, Tia Abner of Laurel, Md., was faced with handling the issue herself.
Abner had a 6-month-old son and an unraveling marriage when she was laid off from her job in 2011. Within a year, she went from building a global health program to spending down her 401(k) to pay for rent and diapers.
She moved home with her parents for a few years and took a job doing marketing for a theater company that paid significantly less.
Last year, as she got ready to take the next step in her career and move back out on her own, Abner, who’s now 33, became worried that what she had considered a transitional time in her life would become destiny in one important area — her pay. Every application required her current salary as a starting point for negotiation.
She said she felt “reduced” to a number — with some interviews appearing to hinge on the figure that she provided.
When Abner found a job posting for her dream job last year, doing development and fundraising for the Wolf Trap Foundation for the Performing Arts, she turned to her good friend Keosha Burns for help navigating the tricky waters.
“Everyone has at least one friend that is really aggressive in this department,” said Burns, who recently started her own public relations company. “That one friend is definitely me.”
Burns worked for several years for Fannie Mae doing communications for a foreclosure prevention program. She was struck by the high number of women who were overburdened by debt.
“The recession hit everyone, but women who were already underpaid were hit even harder,” Burns said.
Burns coached Abner through the negotiation process as she interviewed at the Wolf Trap Foundation. Abner researched other performing-arts organizations and combed through old job postings to get a sense of other salaries for similar positions.
Then she crafted a salary pitch based on her research and what she thought she deserved and needed.
“There was so much trepidation around it,” she said, but she felt emboldened, particularly because the position was in development. “How can you be a fundraiser if you can’t fundraise for yourself?” she said.
Ultimately, they offered her a contract based on what she proposed, not on what she was currently earning.
“I feel like I can stay here and grow,” she said. “I don’t have to leave in a year because I can’t afford it. And I feel good that I stood up for myself.”