No matter what type of business you operate, you need people to get the work done. Unless you are a single person business, getting high-quality employees is a major concern. Attracting and interviewing applicants is an unfortunate part of getting quality employees. This unenviable challenge is something few employers relish.
When you think of hiring new employees, salary is a natural concern. How much should you offer for a job? How flexible can you afford to be in salary negotiations? Offer too little, and you risk quality applicants ignoring your listing or even turning down your job offer. Offering too much could cost you thousands of dollars in excess salary and benefits. There may seem to be a natural solution. The simplest way to find out about salary issues is to ask your applicants about their current salary and salary history. Unfortunately, this can be problematic under recent salary history ban laws.
In many states and cities, asking applicants about their salary history is illegal. By the end of 2018, salary history bans will be the law in California, Delaware, Massachusetts, New Orleans, New York City, Oregon, Philadelphia, Pittsburgh, Puerto Rico and many others. Some have already gone into effect while others are waiting on their effective dates. These rules typically apply to all applicants, including contract and temporary workers. Depending on where your business is located, violating this law could result in severe fines.
The rationale behind these laws is the idea that asking people about salary history may lead to continuing wage discrimination. While this goal is admirable, it puts employers in a difficult position. How can you know what the right salary to offer is?
Salary History Ban Laws
As an employer, why is an applicant’s current salary relevant? If you are like most employers, you use salary history to help you determine the going rate for a job. In addition, salary history may give you a rough estimate of an applicant’s skill level.
If your business is in an area affected by a salary history ban, there are three things you should do right now:
- Review Your Hiring Procedures
If asking about salary history is part of your process, change your process immediately.
- Train Your Staff
Having good policies is one thing; ensuring that your employees follow them is the essential next step. Make sure your staff know and follow all of your hiring policies.
- Stop Releasing Salary Information
If you release the salary information for your current or former employees, you could be participating in a crime. Don’t take the chance; keep salary information confidential.
Getting the Information You Need
If you can no longer get salary information from your applicants, where can you get the information you need to make smart hiring decisions? Surprisingly, this is one time that the Federal Government is helpful. The Bureau of Labor Statistics has compiled exhaustive tables of wages grouped by occupation, State and Metropolitan Areas. You can find the wage information here: https://www.bls.gov/bls/blswage.htm.
You want to find quality applicants, but you have to obey the law. Don’t fear the salary history ban and salary negotiations; do some research and you will know.