Last year, Massachusetts Gov. Charlie Baker signed a bill requiring equal pay for equal work. The bill also banned employers in the Commonwealth from asking prospective hires for their salary history, making Massachusetts the first state in the nation to enact such a law—but perhaps not the last. A new bill would make asking for salary history illegal nationwide.
Recruiters often start out conversations with candidates by asking them about their current salary. Why? For lots of reasons. The most straightforward reason is that people rarely want to take a job for less money than they currently earn. A recruiter doesn’t want to waste her time with a candidate who will never take the position at the budgeted salary. But salary is a proxy for ability. What does that mean? Well, let’s take two candidates: Bob and Sue. Both have a title of Marketing Manager at their current jobs, but they work for two different companies. Bob is earning $125,000 and Sue earns $95,000.
When the recruiter hears that massive salary difference, she’s likely to assume that Bob is a better marketing manager than Sue. The recruiter assumes that their current employers are paying them the correct salary for their contribution to the company and therefore, Bob must be better than Sue. Sometimes, that is true, but sometimes companies mess up. And one thing that happens when a company originally messes up with a salary is that the person is haunted by that for the rest of her life.
As they go throughout their career, raises, promotions, and even new jobs are based on percentages of that original un-negotiated salary. So, while your policy of giving new hires a 10 percent increase over their last position is neutral on its face, it reinforces the inequality that might have started 25 years earlier.
That’s the idea behind the new prohibition against asking candidates about their current and past salaries in Massachusetts.