26

June

How Salary Disclosure Legislation Is Impacting Your Hiring Efforts

New legislation in certain locations now prohibits a common interview question that job seekers have long wanted to avoid: what is your current salary? For job seekers, the question represents something of a mine field. Answer too low, and you limit your starting pay. Answer too high, and you can eliminate yourself from consideration due to being too expensive.

In the states of California, Oregon, Massachusetts, and Delaware, and the cities of New York City, Pittsburgh, Philadelphia, and New Orleans, employers and recruiters are now legally prohibited from asking prospective employees about their job salary history.

How the Law Benefits Employees

For employees and job seekers in the affected areas, the new law presents several advantages for them. First, it takes steps in closing the wage gap by eliminating unconscious bias that statistically results in women and minorities being paid less than their market value.

When someone is undercompensated, and then has their future compensation based on incrementally improving that initial unfair compensation, their compensation will usually continue to drag behind their true market value.  With the new law, employees will not have to cite their salary history, which, ideally, will allow them to fetch their market value.

While the new law eases the burden for job seekers and strives to improve pay inequality, it does create some challenges that hiring managers and recruiters will have to overcome.

Challenge for Hiring Managers and Recruiters

One of the greatest challenges the new legislation presents for hiring is probing candidate interest in roles. While there are a lot of drivers for a candidate being interested in a position, compensation is almost always at the top of the list.

Say you’re filling a position that can pay up $125, 000. If you’re talking with a candidate who is currently making $150,000, that’s something you’d want to know early in the process so that the two of you do not have to waste one another’s time.

So, what should hiring managers and recruiters do to probe candidate interest?

How to Gauge a Salary Fit Without Asking About Salary History

If you’re conducting a job search in one of the affected areas, you’re going to need to approach the topic more delicately. Take a step back from the situation and ask yourself: what was the goal of asking a candidate what their salary history was?

You wanted to discover if the candidate fits within the salary parameters of the position, and to get an understanding of what the cost would be for each of your prospective candidates.

Now that the law prohibits directly asking, recruiters and hiring managers simply need to be strategic in finding a way to have the candidate volunteer the information themselves. One way to do that would be to inform them of the salary range you have the budget for, and then ask them if that is in line with their compensation expectations.

While this route prevents you from those occasional situations where you find a qualified candidate who wants to work below your salary range, informing them of the role’s range allows your company to be compliant with the new legislation. The money you might save isn’t worth the hefty fee and lengthy legal situation you could find yourself in by breaking the law.


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