In the October 24, 2017 Ask The Headhunter Newsletter, we take a deep dive into California’s new salary history law. Is it going to help you get a better job offer?
Note: This article is not legal advice or a substitute for obtaining competent legal counsel about salary history disclosure laws.
You’ve probably heard this from an HR manager who has demanded to know your salary history while you’re applying for a job: “It’s required. If you don’t disclose your salary we cannot proceed with your candidacy.”
It’s akin to a salesman on a car lot demanding to see your bank account balance before he tells you the price of the car you want. Once that cat is out of the bag, you can’t negotiate effectively.
Now the State of California has made it illegal for employers to ask your prior salary. See Assembly Bill No. 168. (See also this article in the San Francisco Chronicle.) This can help you negotiate a better compensation deal.
You have 2 new powers over personnel jockeys
But not so fast. Hiding your old salary isn’t going to help you get a higher job offer unless you can obtain another critical bit of information from the employer: What’s the salary range for the job you’re applying for?
Good news: The California legislature thought of that, too. Starting January 1, 2018, employers can’t ask your old salary and, if you request it, they have to tell you what the pay range is for the job you want.
You now have two new powers over employers and their personnel jockeys in California. You may:
- Decline to disclose your salary.
- Ask the employer “to provide the pay scale for a position.”
What you need to know
It’s important to understand the details of your new rights. Therein lies your real power — the power to avoid wasting your time with jobs, applications, interviews, recruiters and employers who want to break you down so you’ll cave in and accept a lower job offer. Use these powers thoughtfully, and you should be able to get the kind of salary you want.
Here’s what the new California law says (emphasis added):
SECTION 1. Section 432.3 is added to the Labor Code, to read:
432.3. (b) An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant for employment.
Now we’ll expand on the aforementioned two new powers you can exercise when applying for a job.
1. Decline to disclose your compensation
This means never disclose your prior pay or the value of your benefits:
- When you fill out a job application.
- When an HR recruiter from the company requests it.
- When a third-party recruiter (or headhunter) solicits you for a job at the company.
- When you participate in a telephone interview.
- When you communicate with the employer or recruiter via e-mail or otherwise.
- During a job interview, and,
- Apparently, under this new law, after you’ve been hired and you’re filling out employment paperwork.
An employer that doesn’t know your old salary and benefits has a harder time low-balling a job offer. I can’t tell you how many times I’ve heard employers say, “Our offers are 5-10% above a person’s old salary. That’s our policy.” As if that has anything to do with the value of the new job — or the value you bring to it! For more about this, see Revealing my salary earned me a lower job offer!
Never disclose your prior salary to anyone connected to an employer where you’re applying for a job in California (or anywhere else, but in that case for other reasons). Because if you do, you’ve relinquished your rights — because there’s a gotcha in the new law. We’ll discuss that in a minute.
First let’s look at the more important of the two powers California now grants you.
2. Request the pay range of the job
This is the best part. The employer has to tell you what the job pays. This is what will help you avoid wasting your time on jobs that don’t pay in a range you’re willing to accept.
(c) An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.
You read that right. They can’t ask for your salary history, but they have to tell you the pay range of the job you’re applying for. If you ask. So ask! And ask in advance of filling out forms, having interviews, and otherwise investing your time.
I think it’s more important to know the pay range of a job than it is to withhold your own pay information. But, of course, it’s best to use these two tools in tandem for maximum benefit.
Now, here’s the tough-love part. When they tell you the pay range, don’t kid yourself if it’s lower than you’d like. Don’t proceed under the impression that you can “talk them higher” later on. Conversely, if you use this law to apply only for jobs that pay twice what you may be worth, you’ll probably be disappointed if you expect enormous job offers.
Beware the gotcha in this salary history law
Those two new powers can gain you a lot during your job search in the State of California, unless you’re applying for a government job or other job that’s exempt. (Read the full text of the new law.)
Now let’s get to the aforementioned gotcha. Read this next part of the new law carefully. (Emphasis added.)
432.3. (g) Nothing in this section shall prohibit an applicant from voluntarily and without prompting disclosing salary history information to a prospective employer.
Yep. That means you’re free to spill the beans if you want to. And here’s how spilling the beans will get you screwed:
432.3. (h) If an applicant voluntarily and without prompting discloses salary history information to a prospective employer, nothing in this section shall prohibit that employer from considering or relying on that voluntarily disclosed salary history information in determining the salary for that applicant.
Got that? Once you disclose your salary history “voluntarily and without prompting,” much of your protection under this law disappears.
Why you may need a lawyer
Any time you’re dealing with a massive amount of money — like the salary you’re going to earn for a year or more — it may be worth consulting a lawyer. A consultation with a labor or employment lawyer, to ensure you know what you’re doing in an employment matter, will cost you only a small fraction of that massive amount of money in order to protect that massive amount of money. Consider making an initial investment in legal advice, then proceed prudently.
You may also need a lawyer if you find an employer has violated California’s new law, because of one more gotcha:
(d) Section 433 does not apply to this section.
Section 433 of the California Labor Code says:
433. Any person violating this article is guilty of a misdemeanor.
This means that while violations of other sections of the Labor Code are a misdemeanor, a company that demands your salary history or refuses to tell you the salary range of a job is not committing a misdemeanor. This new law does not define the penalties for violations.
If you want to fight violations of this new law, you’ll probably need a lawyer. It might even turn out that this Section 433 clause renders Section 432.3 toothless once it winds up in court.
What about your state?
Similar laws are under consideration (or have already been passed) in some major cities including New York City, San Francisco, Philadelphia and Pittsburgh, and in some states including California, Massachusetts, Delaware, Oregon and Puerto Rico.
Some of the legislation is controversial, and special interests are trying to block it. The Washington Post offers a good rundown in “New York City just banned bosses from asking this sensitive question.”
This issue is so hot that it’s best to look up your own city and state for accurate information.
What’s your best option?
We’ve barely touched on the myriad issues these laws raise. If you’re interested, you’ll find more here: Goodbye to low-ball salary offers.
Whether there’s a law against demanding your salary history or not, you can always say NO and decline to disclose the information. (See Keep Your Salary Under Wraps.) As long as you’re not party to a contract whereby you have agreed to disclose salary information (an employment contract might be an example), you never have to disclose it. There is no law I know of that obligates you to disclose your salary.
Of course, refusing to disclose might result in an employer rejecting you as a candidate. That may be their right.
In that case you may be better off finding a more reasonable employer who isn’t trying to manipulate salary negotiations by insisting on knowing your prior pay. You’ll get the best deal possible if you withhold information about your prior compensation, because the employer will be forced to base an offer on the value you prove you can deliver. (Did we just open a new can of worms? Yup. We don’t pretend anything is easy around here. See How do I prove I deserve a higher offer?)
Have you encountered one of these new laws in the wild? What happened? What’s your take on this kind of legislation — and on how to best protect your ability to negotiate compensation? What other issues do these new laws raise?
As an employee I like this law. I just wonder how many employers will leave the state as regulations grow. Yet, I can’t figure out why California is one of the best places to make money but it gets called the most business unfriendly state.
With only 12% of the U.S. population, California drives 25% of economic growth. I’m originally from the east coast. I lived in Palo Alto for almost 10 years during Silicon Valley’s first heyday. My conclusion: California is what it is because of the lack of old money. While there has certainly been old money in CA, it doesn’t compare to the old money of the east. I think that when old money drives an economy, the economy is conservative. The question is always, why won’t this new idea work? I found in CA that the question was always, what’s it going to take to make this new idea work?
I think CA remains a place where young people don’t worry that something has never been done or that it can’t be done. They go for it anyway. Out of all that fearless (naive?) trial and error comes an astonishing amount of the progress that drives the U.S. and the world.
I’ve never found anything about CA to be business unfriendly. That kind of talk seems to originate with political conservatives who don’t understand the balance between regulation and a free market. As you note, there’s a contradiction there: It’s a great place to make money but it’s business unfriendly? I hear the envy of politicians who can’t make the same happen in their states.
There’s a good article about Governor Jerry Brown in a recent Time magazine: http://time.com/4931041/jerry-brown-the-philosopher-king/
I think it explains a lot.
I don’t know. Loads of businesses go to Texas and do well too and Texas has far less regulations.
It’s possible that CA is in a bubble (kinda like the Dakotas with the oil business).
I agree with Nick. Officials from Texas – a place which loves to screw employees – are the ones saying California is business unfriendly, and that jobs are just fleeing our state. Yeah, fleeing so much that one can hardly move on the freeways during rush hour.
Remember California is also the state that does not allow non-compete agreements. That sure has hurt Silicon Valley and other businesses, hasn’t it?
@Scott — Oh, yah. Prohibition of non-compete agreements totally stalled the development of the personal computer, the iPhone, and hard disk drives.
Not that I want to change jobs right now, because I don’t, but I got an email message about a local job opportunity. For fun, I applied (directly to the company this circumventing the job board it appeared on), and the work location, being local, is in California.
On their application management system, you are REQUIRED to pick a salad range from some preselected ones on their form. I did just that, so I wonder how that will change come January 1. What I think will happen is it will stay just the same as before.
Lots of local businesses have help wanted signs. I guess California is just a terrible place from an economic standpoint .
Salary- not salad – I usually proofread better than that!
Question. Sometimes when I’m filling out an online employment application, the document includes spaces that are “REQUIRED” to be populated. Often times, one of them is current or previous salary. The way I work around that is to type the numeral 1 in the space. In doing so, have I waived my rights under the new California law? Also, I occasionally come across an employment application form that asks for your SS number, and its a “REQUIRED” field. To get around that one I just type 123456789 in the box. Your thoughts sir?
Simple – If I were in California, or applying to a job in California, or anywhere else for that matter – I would not fill out any application that required your salary history. If people stopped doing this en masse, maybe employers would get the idea.
As far as SSN, I would not fill that out either, unless (a) there was a good business reason (b) there was interest in interviewing me (c) It’s not a mom and pop operation
For example, I have interviewed for a large defense contractor on site for a position that required clearance. This required ID and SSN to actually proceed and since they are pretty big, I’d at least know they’d be around to wring their necks if they got hacked.
@Jeff: I’m with Dave, who says he won’t fill out such applications. The problem starts when employers brainwash us into thinking you have to fill out an application to get a job.
No, you don’t. Dave’s right. Go around that obstacle. Find another way in the door. And if they confront you, tell them you don’t fill out applications until after you’ve met with a hiring manager to establish common interests and a desire to work together.
I’m not a lawyer so I’m not sure what it means legally if you enter 1s in the salary field. But my guess is, the employer is free to base a job offer on those 1s. :-)
So, tbh, you’re probably not going to be able to use this to avoid applying to jobs that aren’t in your range. It notes specifically a standard of “reasonable” request (which is yet to be defined, but is definitely included to note that there are times when an employer can refuse), and also notes that they only need to tell “applicants applying for employment.” Which means that they’ll be able to refuse if you don’t have an application in yet. And I wouldn’t be surprised at all if it were eventually determined, under the letter of the law, that if someone asks and you don’t want to answer them, you can just reject them and then, suddenly, they’re not applying anymore!
I like the spirit of this law, and hopefully it will at least make more employers just put their damn range in the job posting, but if businesses decide to be jerks about it I can see this law losing its (already, as you note, dull) teeth pretty quickly.
@Kimberlee: I was hoping you’d chime in – thanks! There certainly are twists and turns in this law. “Applying for employment” might generously be interpreted to mean contacting the employer. Depends on the judge :-). The brevity of the law suggests courts will interpret it in favor of job applicants.
I think we find that intent here:
Employers are already fighting these laws. It’ll be interesting to see what kinds of cases are brought and how the courts interpret these laws — and how the laws are changed.
Good morning everyone,
I am a little confused on this whole issue. For well over a decade my salary was public record. Anyone can look it up. Yet, I have never had a problem getting very close to or exactly the salary that I anticipated. If you know what the job is worth, and that is on you to find out, and what you are worth, which you better have a grip on, then I don’t understand why there should be any issue since you should have already done some research about the company, their culture, and any other information that you would regard as relevant to your prospective employment. If you are low-balled walk away. The employer will just attract and hire lesser quality C and D level people and eventually be gone. Survival is of the fittest (and smartest).
@Tony: Thanks for that, Tony. Complaints about low salary offers are sometimes akin to complaints about telemarketing calls. While both are a waste of time, in both cases you can just hang up. If an employer low-balls you for any reason. “No, thanks” is the answer. You don’t know until you walk away whether they really want you.
We grow up in a culture where asserting ourselves if often frowned upon. You could walk into a job interview with your current salary taped to your forehead and still negotiate an excellent deal. If job seekers would approach every interview with that image in mind, I think they’d have better experiences.
You don’t need a law to go head to head with a difficult employer in a professional, respectful, but firm fashion.
Employers will use salary as a screening data point instead of actually basing an offer off of previous salary. There is an assumption that if you earned a super low salary, didn’t progress your salary or made “too much” in the past that deems you unqualified.
Even if you did your research on a company, they can still ask.
But Dave, it’s so EASY to judge people by their salaries…!
It would be interesting to hear from am employer on this. I was an employer years ago and in my opinion the unintended consequences of these laws is it will complicate the hiring process for applicants.
It seems to me that if I needed to hire these days I will need some way to confirm (for liability issues that I may incur by employing you) your ability and skill level to do the job. Do I hire someone on you or your references’ word?
Why does the law have any impact on that at all? The law does not prohibit checking references, or even the dreaded employment exam. An employer who judges competence only on current salary is asking for disappointment.
I never had trouble judging the abilities of people I interviewed, and I never looked at their salaries.
Salary does not necessarily indicate skill level. Correlation is not causation – Every person or job or business or geographic location are created equal.
If employers were concerned about liability, they would do a much better job at recruiting in the first place, i.e. creating a process that accurately described the job, and fairly rated candidates against that. Simply inviting candidates in for an hour and discussing what their greatest weaknesses are and where you see yourself in 5 years is not finding out if they could actually do the job.
@Dave – Sorry, but that’s in HR 101 at any college. “Salary indicates skill level. Correlation is all you need.”
As in, when asked in an executive-level job interview, if you could be any animal what animal would you be, and you choose giraffe, that correlates highly with failure to observe company rules. (Technical basis: Your head is too high up to read those mandated Employee Notices on the walls.) REJECT.
HR is a very scientific discipline.
I believe the core of this issue is the rule of supply and demand. The more applicants, the more supply thereby allowing prospective employers more leeway in dealing with applicants. When there are fewer applicants (sans qualifications), employers tend to pursue applicants in an entirely different manner. The prospective employer seeks that individual whom the employer perceives to give them an edge against their competitors.
Talk will be endless about this new California law but the fact is the bigger the company, the greater the resources available to hire those lawyers who will find ways to circumvent the law. In this particular case the loop hole is “voluntarily submits.” With the current influx of people seeking jobs for whatever reason, many will voluntarily submit to the prospective employers demands. Prospective employers know this and actually are banking on applicants to voluntarily submit.
It’s possible for applicants to seek remedy for violators but since the law is rather weak, this ensures the greater difficulty in winning in court. Plus the question arises, is it really worth the expense considering it’s only a misdemeanor and one without penalty. Rest assured the courts will look for any opening to dismiss such cases because it’s basically a waste of their time.
One thing is sure, and foundational in business as well as life: You cannot repeal human nature. Employers will always have the upper hand. There may be times they get stung for their actions but the probability factor indicates otherwise and they will proceed on the number probability. Prospective employees will always cave-in when they perceive the desire to align with a particular company or the need for a job to live. And in the words of Sonny and Cher, “The beat goes on.”
Don’t forget that there is one reason an employer hires anyone: They need help. For many companies, life hangs in the balance when they try to make payroll during lean times. I have a friend who handles accounts and payroll for her company – and it’s a balancing act.
Like any other business relationship, both sides of negotiations will try to gain any advantage possible.
One does not have to accept this kind of game playing. At the same time, I fully understand needing ANY job. I have had jobs like that before where the employer has the upper hand. Working conditions can be so bad that such things as the unemployment line and bankruptcy court are not as bad.
Don’t let anyone take away your dignity.
In California at the moment almost every store I see has a help wanted sign, and competition for top performers is fierce. The biggest problem is cost of living, and it does an employer no good to low ball an offer to the extent that the applicant can’t afford to take it.
I’ve worked for very big companies, and none of them low balled applicants. I suspect this is more an issue when the hiring manager feels the money is coming out of his or her pocket – literally or figuratively.
The only case I knew of was my psycho boss cutting the salary offer HR came up with – but I think it was for more than he was making, and he was jealous. Otherwise managers don’t want to lose a good person for a few thousand bucks.
@Tomas Schafer: “…many will voluntarily submit to the prospective employers demands. Prospective employers know this and actually are banking on applicants to voluntarily submit.”
I think the applicable text in the legislation states, “(b) An employer shall not, orally or in writing, personally or through an agent, SEEK salary history information, including compensation and benefits, about an applicant for employment” [emphasis in all caps added]. In addition, the law states, “(h) If an applicant voluntarily and WITHOUT PROMPTING discloses salary history information to a prospective employer…” [emphasis in all caps added].
So if the employer or their agent do anything to prompt an applicant to disclose the information, they’re in violation of the law. Applicants who run up against requirements to disclose salary history information, they can contact the firm directly and inform them that their online application process is in violation of the new law and also report them to the appropriate state office.
Even if some or many would-be applicants knuckle under and “voluntarily” submit the information after having been “prompted” to do so, the company may still have some problems due to having prompted the “voluntary” disclosure.
One of the things that is so delicious about this is that HR has used to mantra of “compliance” as a key reason for them having hijacked the hiring process away from the actual managers and supervisors. Compliance uber Alles! It would be fun to hoist some of them with their own compliance petard with respect to this law (which they really don’t want to comply with).
What we’re still trying to figure out is, what’s the penalty when an employer violates this new law? We know it cannot be treated as a misdemeanor.
Apparently, there’s no immedidate penalty imposed by the state on the company. But I still think it’s a good thing that it passed, as it will give more and more prospective applicants the moxy to just say no, and perhaps inform the company–which is into compliance, don’t you know–that they are in violation of state law and just might be reported.
The law seems to have no teeth, but if changes the mindset of both the employers and applicants, it may have some effect.
By the way, my favorite examples of companies and recruiters demanding my salary history pertain to positions which involve negotiations as part of the job description. Even better, the listed requirements say that you must have “proven” or “demonstrated” negotiation skills.
Isn’t it the height of stupidity and hypocrisy for an employer and/or recruiter to demand up front that the “proven” and “demonstrated” sharp negotiators they claim to want to hire must violate the first principles of negotiation at the very start?
But don’t bother trying to point it out to them.
I’d like to add a couple more observations about this legislation.
The first is that the law does not prohibit an employer from requiring applicants to indicate their preferred salary range (whether as part of the application or during an interview). However, if asked to provide that information, applicants can then first request that the company disclose the pay scale for the position, citing Section 432.3(c), which states: “An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.” Surely, the applicant’s request for the pay scale would be deemed to be “reasonable,” given that it was prompted by the company’s request for the applicant to provide their salary range.
The second issue is that the law raises some interesting situations for companies with multi-state operations. Let’s say that a company that is headquartered in California–and perhaps has its centralized HR hiring bureaucracy located there as well–has operations and employees in various other states. Even if the job is not located in California, if the employer of record is a California entity, this law would arguably apply. What about companies that are not HQd in California but have employees there? I suspect the state would say that if the employee and the job is in California, the law applies even if the employer of record is incorporated elsewhere.
Finally, it’s a shame that this type of legislation was promoted and pushed through on the fallacious notion that women are underpaid vis a vis men and that requirements to disclose salary history are a tool contrived (by HR departments dominated by women?) to keep women down. That was alluded to in the San Francisco Chronicle article Nick linked in his post. Here’s another article that gets into the feminist angle a bit more:
This could bite them in the arse, as I believe that men are disproportionately harmed by requirements to disclose salary history. But if the feminist angle is the way for such legislation to be pushed through, I won’t argue against the method.
Nick, one question. What if the question from HR is: “what is the minimum compensation that you would accept?”. This was for a position in NY. I know the answer is that I should be talking with the hiring manager (which I am trying to do), but there are a myriad ways to ask this question, such as: “what is the expectation you have around compensation?”
This is where you ask, without fear of recrimination, “What is the salary range for this position?”
@Mario: Robert’s answer is a good one.
If they ask you what you want early in the process, another smart response is, “Are you offering me the job? When you offer me the job, we’ll negotiate a fair compensation that’s good for you and for me.”
That re-sets the context. We don’t talk money until the employer commits to offering the job.
Then there’s this — said with a big smile: “Are you negotiating with me?” Whatever they say, your next response is, “Make me an offer and I’ll tell you how close it is to my expectation.”
Listen — an employer asking you such questions is the oldest manipulation in the book. Don’t fall for it. I’ll illustrate what they’re REALLY asking you with an example.
A few weeks ago, I was negotiating the price of a car with a salesman. My wife had already decided she wanted that car and no other. That’s a tough negotiating position, when you’re not willing to walk away. A trade-in was involved, though we didn’t know whether we’d do the trade-in or sell it ourselves. So the trade-in was a good bargaining chip for us AND for the salesman. It gave us both one more term of the deal we could use to our respective advantage.
We had told the salesman we just came from another dealership — the one that sold us her current car and several others over the years. We had been pretty loyal customers. And we were big fans of that brand of car. Now this guy was trying to convince us to switch brands.
After much discussion, the salesman ignored my wife (even though she was buying the car) and leaned across his desk toward me, very seriously. “Now, Nick. I want to ask you a serious question. And I want you to tell me the truth.” This was a new gambit I’d never seen from a car salesman. I eagerly moved closer to hear this. “What did the other dealer offer you on the trade-in?” (My wife was miffed at the guy’s sexism, but she controlled herself.)
I almost burst out laughing. He really thought I’d tell him? Yes, he did. I could tell this had worked for him many times before. But the question was no different from that employer asking you what the minimum salary is you’d accept.
I had to work hard to keep a straight face. You have to remain respectful in any negotiation you hope to win. You can’t make the other guy feel insulted. So I didn’t laugh at him. “I’m not going to tell you that,” I said quite sternly, then paused to let it sink in. Then he made his big mistake. He moved back from me after he had leaned in so close. That was submission. I leaned toward him now. “You tell me what you’re offering,” I said.
He doodled around on his computer a few minutes. I nudged my wife under the table, indicating she should not utter a word. I actually had to work hard to keep my own mouth shut during the long, awkward silence. He had to deal with it, too. Let him make the next move.
After explaining my wife’s trade-in had many more miles than the average for its age, and that his dealership didn’t deal in that brand, and a few more “justifications,” he offered 31% more than the other dealer, whose nice offer reflected the fact that it had sold us the car we were trading in — the brand it specialized in. This new dealer didn’t carry our trade-in’s brand. But he wanted to close the deal.
I could have gotten more out of this guy for the trade-in, but I didn’t want to beat him up since he’d already caved pretty far. I wanted him to be happy. I want everyone I negotiate with to be happy. So I didn’t argue about the trade-in price. Instead, I took my wife for a private talk outside the sales guy’s office. We came back, and I negotiated harder — this time on the sales price of the new car. He came down more. I thanked him and took the deal.
When you decline to disclose your position (what you want), and shut up, and wait, you find out whether the other guy really wants to make a deal. You find out whether he really wants to hire you.
Whether it’s HR or the hiring manager, show them that negotiating comp comes after they tell you they’re ready to hire you and want to make you an offer. Until then, any talk about money has to come from them. Don’t give in.
I played a variation on this theme. We were set on a specific car, trim line, and color that we knew they did not have on their lot.
I priced my trade at 3 other dealers before going to the new car dealership, which took about an hour. I did online pricing research. I used one of those buying services to price the new car too, and the dealership’s price was one of the bids returned. The dealer traded around and got the new car 140 miles from Long Island to us. We used the other trade-in offers to get the price we wanted on our old car. Made $1,200 for that hour we invested.
The dealer tried to pressure us into extra warranties during the financial manager’s turn. I stood up and said loudly in the dealership packed with customers, “If you have so little confidence in your vehicle, maybe we should leave and consider another brand”. Heads turned and we got what we wanted.
If you have ever bargained, or watched Pawn Stars or the like, you know that the minimum salary should be on the high end of the range you would want, or a bit higher. When asked “what is the least you would take for this sprocket” the merchant never gives that answer, but always goes down if necessary.
You might try an outrageously high number – and then laugh and give your not so outrageously high number. The principle of anchoring states that people anchor to a very high or low number that they hear, even if irrelevant to the situation, and then tend to go higher or lower than if they have not been exposed to the number, My daughter and I taught a class on behavioral economics for engineering, and did an anchoring experiment – which worked every time.
@Scott: “My daughter and I taught a class on behavioral economics for engineering, and did an anchoring experiment – which worked every time.”
Anchoring fascinates me. Where did you teach the class? Have you written or published anything from it?
I’m pleased that California has joined Massachusetts, Delaware, and Oregon in enacting this kind of law, and even more pleased that the law requires employers to tell people the salary range if asked.
I am also sure that there will be a bevy of lawyers filing lawsuits on behalf of employers in the name of freedom and government overreach. The devil as always is in the details–how will the law be enforced, what specifically are the penalties for those who flout it. It will take a number of lawsuits to get it hammered out.
I think it is also a matter of education–applicants need to know that there are no laws (yet) REQUIRING them to disclose their salary history. If the company requires it, then I think applicants need to learn that they can walk away with a thanks but no thanks, or, to answer this question with a question (I do this all time) “What have you budgeted for the salary and benefits for this position?” It is an important question, and since we’re all adults, we should be able to talk about this like adults. But too many employers take offense–I’m not supposed to ask until they’ve made me an offer and I’ve accepted. My hope is that more states will pass such laws so that eventually the majority of states will not permit this kind of thing.
Here’s a thought: Some companies may consider salaries to be proprietary – a trade secret. I suppose it could be considered something covered by a non disclosure agreement. As odd as this might sound, I can see where a company does not want to share this kind of information.
@Kevin: I don’t see how salary, particulary when YOU the employer has advertised an open job, is proprietary. As a prospective employee, I need to know whether I can afford to work for you BEFORE I accept a job offer. If you refuse to tell me until after I’ve accepted, that puts me in an impossible spot if the job pays too little for me to support myself. I’d rather know much sooner (so I don’t waste my time or yours applying for a job I can’t afford to take).
Marybeth: I certainly agree with you – and I do ask for a salary range. For one company they refused to give me a range and asked me to state my needs. I played along and did that – it turned out that I overbid and after a third interview, I never heard from them again! On the second interview the HR person said they were VERY interested. Some time later I saw the HR person in a store and instead obaconowledging me, she started walking away VERY fast! Since then I have been trying to figure out what that was all about.
If I came across that same situation, I would just simply say that unless I understand what the budget is, I will not proceed with the interview.
@Kevin: I discuss this in my PDF book, Keep Your Salary Under Wraps. If your employer’s employee policy manual has a section about company confidential information, your salary may be covered — thus you should not disclose it to another employer who asks. Your acceptance of your current employer’s job offer may legally bind you to keep certain info confidential. It’s a good way to decline to disclose salary.
@MaryBeth: “I think it is also a matter of education–applicants need to know that there are no laws (yet) REQUIRING them to disclose their salary history.”
BAM. That’s it. End of story. Doesn’t matter if your state does not have a law like California’s. You STILL can hide your salary. Only difference is, they can reject you for it. But that’s good. They expose themselves as unreasonable bullies. Who wants to work for them?
Companies could save everyone a lot of problems if they were clear about what they are looking for and a salary range they are willing to pay. They know what they think the position is worth and it will avoid people applying who are outside the range. Basing the value of a position on the candidate’s previous pay is nuts; evaluate people on what they bring to the table. It shows how out of whack businesses are when you have to legislate common sense. This sort of tactic reflects very poorly on any organisation that uses it.
It’s just astonishing the lengths to which HR will go to avoid disclosing the salary range on an open job — while demanding to know YOUR salary. It’s so atrocious it’s hilarious! HR is willing to waste time with applicants who’d never accept a secret salary range because it’s too low — yet wants applicants to save HR’s time by disclosing what they make.
STOOPID. Yet people fall for it every day.
What astonishes me is how many HR people blindly defend this practice as “policy.”
Let’s do a thought experiment.
HR and others have various “reasons” as to why it must know your history. Usually they are rooted in trying to figure out your skill level/flight risk/what is the lowest you’d except.
Now, if you try to ask them about their salaries, i.e. what is the average salary of the team/management, average tenure, etc. and even any compensation for the recruiter, they will most likely balk and say it’s confidential/proprietary.
This is by definition, hypocrisy. They want you to lay out your salary/compensation history, which is also confidential/proprietary. And, we can use the same reasons that are used for wanting to know salary history: we want to know the skill level of the team/management, whether you pay market wages and how likely it is going to be for people to leave (and you get all their work when they do).
I think that Illinois now has such a law too.
Nick, I have to ask, for California and other states with similar laws, what’s to stop a company from using an out-of-state third party hiring app or whatever that would require you to give your salary in order to proceed as part of a loophole to the law above?
These corporations are pretty wily. I mean, companies like Disney, knowing that directly couldn’t lay off Americans and make them train H1Bs, used third party Indian body shops to do their dirty work as part of a loophole in the law.
Also, it’s possible that they could just cut more jobs and use staffing and temp, which I’m not sure if this law applies to them either.
Of course, refusing to disclose might result in an employer rejecting you as a candidate. That may be their right.
That is ANOTHER gotcha in the law. While they may not be required to ask you it, if you can’t bust them for doing so, then you’d also have trouble proving that they didn’t hire you because you didn’t go along.
@Paul Adcock: Looks like the House just overrode the governor’s veto on 10/25, and I believe it now goes to the Senate, which will also have to override the veto. The legislation, which is an amendment to existing law, does have some teeth, but the applicant would have to file a civil suit for those to apply. Nevertheless, if it is finally enacted, applicants can cite the law when encountering employers who demand salary history.
Is the workaround for the pay scale provision simply a HR fix of putting of range of 50-175k on the Product Manager Role – i.e. – a wide range that basically is no information?
If a company refuses to advance your application process for your not violating previous company confidentiality, publicly name them here.
The momentum is building. The WSJ just published an article on this very thing. That said, this part makes me laugh:
” “Pay and promotions are not secretive topics anymore,” says Mary Ann Sardone, who consults with large employers on compensation issues and leads the workforce-rewards practice at benefits consultant Mercer, a unit of Marsh & McLennan Co.”
“Companies are spending more time ensuring their pay decisions are fair, and highlighting career paths under the assumption that the information is going to be widely shared,” she says.”
Ask Me How Much Money I Make: Pay Gets More Transparent
Oct. 26, 2017
Tell that to major high-tech Silicon Valley employers, especially if you work with contingent recruiters (sometimes in-house ones), where the majority of jobs are temp/contract. I sense that the WSJ article deals with direct-hire positions and NOT contract ones.
More often that not, the contingent recruiters will broach the subject first, usually with a quick “What are your salary requirements?”
I ALWAYS answer, I’m sure the client company’s HR department has a budget they have to adhere to and they know what the range is.” Or verbiage in that ballpark. And even then, you’re potentially playing with fire.
Sometimes that’s not enough. One recruiter I just talked to had the audacity to ask me how much I am making now. Serious. This was AFTER he gave out the range.
Nick is on to something here. Guys/gals, it’s gonna take a lot of false starts, hurt feelings, slammed phones, and much, much more PATIENCE to work with these glorified car salespeople.
Moral of the story? Employers want the experience but don’t want to pay for it. That will never change. I’ll be pleasantly surprised if it does. But probably not in my lifetime.
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