Dive Brief:
- Women who refuse to answer questions about their salary history are paid 1.8% less than those who disclose that information, according to a new PayScale study.
- Nearly half (43%) of all respondents in the study were asked about their pay history. Finance and insurance industry professionals were asked most often, and HR professionals were more likely to give information when asked.
- Only 23% of candidates refused to disclose their salary history when asked. Senior-level candidates were asked more often and less likely to answer, while Baby Boomers were more likely not to respond. Among all generations surveyed, millennials were most likely to oblige.
Dive Insight:
What's the more eye-opening result from this survey — that women who wished to withhold their pay history information were more likely to risk a pay cut, or that so few job candidates did the refusing?
Even in Boston, a large metropolitan area with its own pay history ban on the way, less than a third of those applicants surveyed refused to disclose that information, PayScale notes. Pay equity advocates will likely find that statistic perplexing. Are employees really aware of the effect such questions might have, and do they feel comfortable enough to refuse an answer?
These questions are also important for the host of city and state governments that have passed legislation on this issue in the past two months alone. We recapped the effective dates and/or current status of those laws below.
The State of Salary History Question Bans in the U.S.
| State/City/Locality | Effective Date | Details |
|---|---|---|
| Delaware | 12/14/17 | |
| Massachusetts | 7/1/18 | |
| New Orleans | In Effect | |
| New York | In Effect | Applies only to state employees |
| New York City | 10/31/17 | After banning pay history question for its own agencies, NYC has now expanded regulations to apply to private employers as well. |
| Oregon | Estimated Oct. 2017 | |
| Philadelphia | Delayed | A judge has stayed implementation of the law while business groups challenge it in court. |
| Pittsburgh | In Effect | Applies only to city employees. |
| Puerto Rico | In Effect |
Note that the debate over how effective/costly these laws may be hasn't ended in Philadelphia, the first city to ban pay history inquiries. Confounding the issue further, a federal court ruled in favor of employers on the issue of pay history questions in May.
The extent to which pay history questions affect the wage gap between men and women isn't certain. Even so, this aspect of the hiring process is only one of many ways in which gender bias might creep into salary negotiations. Also a factor? The understated evidence showing that most workers are unlikely to negotiate for higher pay at all.
Employers should go beyond base compliance in their effort to mitigate pay inequality. Consider increased transparency when it comes to wages, and encourage managers to be as open as possible with employees about the issue. Recent HR grads now take courses on pay equity during graduate work, furthering the knowledge base around the issue.
