This week has seen the implementation in New York of a landmark ban on candidates having to reveal their salary history in the negotiation for a new role.
Last year, the same law was passed initially in Massachusetts and later in Oregon, prohibiting employers from using an applicants’ salary history or current remuneration to determine compensation, as well as preventing employees from sharing their pay with colleagues.
The ban is being referred to as an important step in combating gender pay inequality, with recent studies by the Institute for Women’s Policy Research showing that in New York State, women earn 13% less than their male counterparts. New York based Public Advocate Letitia James was quoted as saying that ‘by banning questions about salary history, we are putting a stop to an employment practice that perpetuates gender wage discrimination and hurts all New Yorkers’.
In addition to a milestone for gender inequality, this can also be viewed as a victory for job seekers in the much vaunted ‘war for talent’; empowering candidates who seek the opportunity to justify their worth through an interview process, without feeling blinkered by their current earnings, or with a ceiling to their potential salary offer.
From an employer’s perspective, this may create difficulties in terms of gaining a perspective on what a competitive offer should look like, particularly at the more senior end, however all open positions will surely have a salary range in mind, and every candidate surely deserves a chance to justify their case for achieving the top-end figure without prejudice. Moreover, employers may conversely see an upswing in the standard of the candidates they are interviewing, who are relishing the opportunity to not only be offered a position, but justify the kind of upswing they may deserve but don’t feel is realistic based on current salary.
Ultimately, whilst this ruling may shake-up the hiring process in New York, Massachusetts, Oregon and perhaps worldwide, surely the chance for candidates to bridge gaps in equality and justify higher salaries can only make for a more competitive and motivated employment market moving forwards.