Asking a job candidate about his or her pay history can be seriously unhelpful when it comes to closing the gender pay gap.
It can see many women taking their current pay discrimination into a job interview, and then potentially into their next job.
So much so that in some parts of the United States, employers have been banned from asking this question.
And large tech companies like Amazon in the US are applying blanket bans on such questions across all country-wide hires. According to an internal memo at the tech giant cited by Buzzfeed, staff and recruiters have been told they must not “directly or indirectly ask candidates about their current or prior base pay, bonus, equity compensation, variable pay, or benefits”. They are also no longer allowed to, “use salary history information as a factor in determining whether or not to offer employment and what compensation to offer candidates.”
Meanwhile, Google says it hasn’t used pay history data to help determine salaries since 2016, and will also stop asking the question. VP Laszlo Bock’s 2016 Washington Post op-ed on the matter said more companies should tackle ‘anchoring bias’. “When it comes to making pay decisions, we anchor too much on someone’s current salary instead of what the job is worth,” he wrote.
California’s Salary Privacy Law was passed in October last year and took effect from January 1 as a means to help close the state’s gender pay gap, following Massachusetts, Oregon and Delaware and a number of cities including New York in issuing the bans.
The California bill allows job candidates to offer their own salary history information — and for employers to then consider it.
According to the bill’s principal author Susan Talamantes Eggman, it gives “Women the power to determine for themselves where they start negotiating … Women negotiating a salary shouldn’t have to wrestle an entire history of wage disparity.”
So will these laws make a difference? Could they work in Australia?
A November survey by search firm Korn Ferry of 108 employers in the US, found that two thirds did not believe the move would make much of a dent on improving pay differentials in their organisations. Korn Ferry suggested this could be because such companies only have small pay gaps or may already have rigorous systems in place to avoid gaps from occuring.
According to Korn Ferry, it’s the companies with a ‘let’s make a deal’ type culture where such bans could really make a difference. Companies that continue to rely heavily on pay negotiations for setting salaries and bonuses, and that do have robust processes — or even just the widespread awareness of the issue amongst staff — to avoid discrimination in setting pay.
More hiring managers and recruiters in Australia should consider how the questions they ask in job interviews could be entrenching bias and discrimination, especially when it comes to questions about salary history.