When applying for a job, most people have been faced with the question: What is your current salary? If the employer doesn't have a set pay scale for the position, you're faced with a dilemma. Handing over your current salary can significantly reduce your bargaining power, but refusing to provide it makes you seem uncooperative and could cost you the job. For some employees, particularly women, this can lead to pay disparities that follow them from job to job. Salary history bans are aimed at addressing this issue.
In most states, employers are free to ask job applicants about their current or prior salaries. However, many states and cities are considering salary history bans that prohibit this practice. So far, more than a dozen states have passed this type of law, including California, New York, New Jersey, Illinois, and Washington. Some cities, such as New York City and San Francisco, have passed similar laws. (To learn about California's salary history ban, see our article on California equal pay laws.)
Two states, Wisconsin and Michigan, have bucked the trend by enacting laws that specifically prohibit salary bans.
Salary history bans are designed to narrow the pay gap between men and women. Recent studies have shown that the gender pay gap is alive and well. Various studies show that women earned around 80% of what men earned in 2016. The pay gap is even larger when taking race into account. African American and Latino women earned around 55% to 60% of what a white male earned.
The federal Equal Pay Act and similar state laws make it illegal for employers to pay men and women different wages for the same work. Despite these laws being on the books for many years, the gender pay gap persists.
Legislators are beginning to recognize that certain practices perpetuate inequality in pay, even if there isn't necessarily a discriminatory intent. One of these practices is relying heavily on an applicant's previous pay when setting the salary for a new job. Doing so often causes inequality in pay to follow women from job to job.
A salary history ban prohibits employers from asking applicants about their current or past salaries, benefits, or other compensation. This means employers can't ask about your current salary on job applications or other written materials or ask you about your salary in an interview.
In some states with salary history bans, employers are allowed to seek salary history information after making a conditional offer of employment with a specified salary. However, if you voluntarily tell a prospective employer about your current or past salary, it is typically free to use that information in setting your pay.
If you live in a state with a salary history ban, you have the right to refuse to answer questions about your salary. Employers may still ask you what your salary requirements or expectations are for the position, though. If you live in a major metropolitan area, you should check with your local government to see if it has a salary history ban.
If your area doesn't have a salary history ban, you'll have to do some creative thinking about how best to answer the salary question. One tactic is to ask what the salary range is for the position first, so that you have an idea of whether your current salary is in the ballpark. Another tactic is to delay the salary discussion until you've had a chance to interview—and prove your skills and worth.
Sometimes an employer or a recruiter will insist on knowing your current salary in the early stages of the application process. In that case, you should be truthful about your salary, but also mention the value of your benefits package, bonuses, or other perks. Or, you can decline to answer and hope that you'll still be considered for the job.
If you think you're being paid less than a male counterpart with similar experience, qualifications, and seniority, you should talk to an employment lawyer. Federal law, and the laws of many states, make it illegal for an employer to pay men and women different wages for the same work.
According to the Equal Employment Opportunity Commission and some (but not all) courts, your prior salary alone is not a sufficient reason to pay you less than a male employee performing the same job.