Philadelphia Mayor Jim Kenney signed a bill on Monday that prohibits employers from asking candidates about their salary history. Like the Massachusetts bill that passed this summer (but won’t go into effect until January 1, 2018), the goal is to help end gender pay discrimination.
The theory is that since women tend to have lower salaries than men, and since many businesses make their current salary offer based on previous salaries, one underpaid job in 1992 can affect you the rest of your life. By prohibiting employers from asking about your salary history, hiring managers will have to make a salary offer based on market data and won’t be influenced by a low previous salary.
I’m not a fan of government regulations, but I like the idea behind these laws. Businesses should be looking at market data. They should be the ones to say, “this job pays $X per year, are you interested?” I don’t think this will solve all problems, but I do think it will help. However, Wharton Professor Peter Capelli thinks it could backfire and hurt the people it’s claiming to help.
To keep reading, click here: Philadelphia Joins Massachusetts in Making Salary History Questions Illegal
So the mayor of Philly signs a bill that only applies in Philly. Philly law can’t bind the state of Pennsylvania. Companies won’t hire anyone to work in Philly, they’ll be assigned a permanent duty station outside the city limits and periodically do work in the city.
Much like Philly’s “soda tax” (1.5 cents per ounce), it moves the jobs out of the city.
Now as for the merits of divulging/not divulging salary history: one needs to define “history”. Is it what am I currently being paid or what was I being paid at my last five jobs? One of the examples in the articles the person had reduced hours: well, that easily explains the lower yearly salary “My current salary is X for a 15 hour week, 9 months of the year” Easy enough to convert it to 40 hrs/12 months.
What the “law” does: forces a company to evaluate a candidate based on the qualifications and experience they bring: every job has a salary range the company is willing to pay (not always driven by the market), the interviewee must meet some minimum requirements, that minimum starts the offer at the low end of the range. The value added by the interviewee pushes the offer up the range.
If companies would post the salary range for a job or actually answer that question when asked, current salary becomes moot (my opinion).
Don’t think people won’t take a lower salary then they currently make; common in tech where the person thinks the new job will be “better” (more interesting, different) than the current one.
I agree–I’d love to just have companies post the salary and be done with it.
I’m not following Capelli’s argument.
A company that pays fairly is unlikely to start thinking “hmm… All women are paid less, therefore we should always offer them less than a man.”
Would any recruiter do this? They would have to know that they are creating an obvious paper trail of discrimination.
I’m not in agreement with Capelli either. I see exactly where he’s coming from, but I don’t think it’s going to play out the way Capelli thinks. We’ll see!
Capelli’s reasoning is faulty and circular. Women — who are already underpaid, as a result of employers making low-ball offers to them, based on prior, discriminatory, salaries — will somehow be harmed by employers continuing to make disparately lower salary offers to them, as a result of this legislation?
The “gender pay gap” is long since disproven as really reflecting women choosing to take less hazardous jobs and work fewer hours, often for reasons of family life — and while I sympathize, I don’t consider it everyone else’s duty to subsidize those choices for the individuals who make them.
As for the law in question here, it will not work for the same reason that laws against age discrimination don’t work — because no one but a mind reader can prove the reason a decision to hire or not to hire was made. If you really want discrimination for those reasons not to take place, you’ll need to enact Germany’s employment laws (in which every decision not to hire someone must satisfy a government hearing board).
Short of that, forget about enforcing the impossible and simply legalize discrimination in all its forms. Those who feel the need to segregate themselves may as well do so and pay the social and economic price that will result, without any need for government to collect it from them.