In Massachusetts, it's about to become illegal for employers to ask a question every job candidate hates to answer: What's your salary history?
The measure, part of a sweeping equal pay bill signed into law Monday by Republican Gov. Charlie Baker, is a notable first: When the law goes into effect in 2018, Massachusetts will be the first state to prohibit employers from asking candidates about salary at their past jobs. Eliminating that question has been described as a key but often overlooked way to close the gender pay gap. Indeed, if companies stopped asking women what they made before, it could be a powerful way to disrupt the cycle of lower salaries that studies have shown women earn, on average.
But the gender gap is not the only opening that could begin to close by eliminating the salary history question. It could also help, at least in a small way, narrow the chasm in information between job candidates -- male or female -- and the employers who hire them. As a result, dropping the dreaded past salary question could prove to be a popular solution that finally demonstrates why working for equal pay helps everyone -- not just women.
Think, after all, about the asymmetry of the job interview. Yes, there are a growing number of online tools for employees to research salary data. But for many jobs, employers have far more sophisticated data about what the market tends to pay than most individuals could dream of having. Employers also know what their budget will allow -- numbers that, again, are out of reach for most workers. And if employers also find out what candidates have earned in the past, they have yet another data point that will guide future salary discussions.
"Most employees don't go into interviews with the same access to information as the employer," says Jennifer Reisch, the legal director of Equal Rights Advocates, a civil rights nonprofit in California. "The employer has information the employee will never know."
Companies may benefit from that imbalance -- why pay more than you have to? -- but it's hard to imagine it doesn't hurt them in some ways, too. Feeling underpaid, after all, is something both men and women experience. Candidates can feel put on the spot or feel the question is unfair. Is that how an employer really wants to start off a relationship with a new hire?
Meanwhile, many job candidates understandably question why former salary should decide what they earn in their next job. Some human resources experts argue it shouldn't. "The only argument I’ve heard [for asking the question] that has any bit of credibility is that it saves recruiters time," says Brian Kropp, the human resources practice leader at advisory firm CEB. He calls the Massachusetts law "unambiguously a good thing."
"Fixing it requires us to focus on paying people what a job is worth — and not basing a pay decision on someone’s current salary," Bock wrote in an op-ed in The Washington Post in April.
It's companies that should do the work of setting the initial value of the job, not employees. If candidates can then negotiate better pay, all the better.
Of course, it's important to note that the new law does not prevent people from volunteering their salary history. And as written, the law doesn't appear to keep employers from asking candidates about a desired salary range, employment lawyers say. While it may limit the discussion, "it doesn’t make salary a taboo subject," said Amber Elias, an associate in the Boston office of the law firm Fisher Phillips. Many employers who want to know what it will take to hire someone "will find other ways to get the information they're looking for."
What the new law does do, however, is offer a logical solution for fighting the gender pay gap that could also help job candidates -- women or men -- feel like the scales are tipped a little less in favor of employers. When it comes to data about pay, the divide between employers and the people they hire remains wide.
Who knows if other states will follow Massachusetts' lead, or if companies will standardize the concept on their own in areas outside the Bay State. (Kropp thinks they will: "A lot of [companies] are going to say we don’t want the complexity.") For now, this smart idea for helping to close the gender pay gap in Massachusetts could help narrow the information gap there, too -- something all employees are likely to cheer.