Massachusetts recently made a huge step to help close the pay gap for women and people of color by making it illegal for employers to ask about salary history before making an offer.
That means that women and people of color who have been paid under-market rates can reset their future earnings every time they negotiate a new job. Low salaries will no longer follow them from job to job.
Why employers shouldn't ask about salary history
It sounds like such a simple question when HR and recruiters ask, “how much were you making in your last job?”
But let me remind you that the following questions seemed innocent to some just a few years ago and are now illegal: Are you married? Do you have kids? Are you planning on having kids?
Employers claim that they need to know salary history as a way to quickly weed out applicants. They argue that they don’t want to waste anyone’s time if the job pays $78,000 and the applicant was making $98,000 – or vice versa.
Sure, that makes sense. But the practice has a lot of problems. The employer makes assumptions about what your skills and experience are and what your desired salary is based on your past salary. Those assumptions drive what jobs, titles, and pay grades they’ll consider you for. And they use past salary as a baseline for how much to offer you, which likely puts a ceiling on your salary, even if you negotiate.
Consider how it might impact you
What if you were in a job where you were doing the exact same work as the guy on your team, but he was getting paid a management level salary and you’re still getting paid as an individual contributor? Future employers may note your pay and not consider you for management level positions.
Or what if you were working in a historically underpaid industry like teaching and now you’re switching to the tech industry. Even if you have the right skills and experience for the new job, an employer may note your latest pay grade and refuse to negotiate within market rates, perpetuating your low teacher salary.
Or maybe you weren’t discriminated against, but you’re aiming to make a lot more than your last job (good for you!). Armed with your salary history, an employer would make an offer at or slightly above what you were making before, making it harder for you negotiate up to your desired range.
Or what if you left the job market to take care of kids or aging parents, and you took a lower paying salary in return for fewer and more flexible hours? Now that you’re ready to ramp up your career again, your salary history isn’t inline with market rates. You’ve got that low anchor point to deal with.
There's no need to give your salary history
Here’s what employers don’t recognize with their questions about salary history. Salary history simply has no bearing on anything. It has nothing to do with what the market is paying today.
So what is relevant when an employer is screening applications? An applicant’s skills, experience, and training.
What’s relevant when negotiating salary? An applicant’s skills, experience, and training, market rates, and what the company has budgeted.
So big kudos to Massachusetts for making skills, experience, and training the appropriate things to consider when hiring – and making it illegal to ask about salary history.
It’s an important step that will help close the gender wage gap in Massachusetts. I hope we see this change happening in every state. In my home state of California we need all the help we can get to close the gap. Women overall make 84 cents for every dollar a white man makes. Black and Latina women make 63 cents and 54 cents respectively, for every dollar a white man makes.
How to answer when asked about prior salary
So what should those of us who don’t live in Massachusetts do when asked about salary history?
Before a job offer
I tell my clients to avoid answering the question - especially before it's clear they are going to hire you.
If the salary history question is on a written or online application, I recommend writing something like, “negotiable,” “to be discussed”, “commensurate with experience,” “NA – non-profit industry,” or NA - part time role.” If there’s more room: “I’m happy to discuss salary after learning more about the position.”
If you're speaking with someone in person, you can say something like, "I'm really excited to hear more about the position. Can we put off any salary discussion until we've had a chance to talk more about the role?"
If you get into a position where the recruiter or employer is getting annoyed with you, you can put the ball back in their court:
“I gained some great experience at [past employer] that will be applicable at [potential employer], but I really want to focus on the skills I can bring to [potential employer]. While I’ve done some research on what the market ranges are, I’d love to know- what’s the salary range the company has budged for this position?”
If the person you're speaking signals that he or she is not going to consider you unless you give your previous salary, you can answer without worrying you've botched your negotiations if you do these two things:
(1) Make sure that the number you give includes your entire compensation package, not just your base salary. This helps you anchor higher while still being truthful.
(2) Re-anchor with arguments about why your past salary isn’t a good indicator of your market value. Some good reasons: it was a contract position, a part-time position, in the non-profit sector, in a historically underpaid industry, or the position is substantially different than the job for which you’re applying.
After a job offer, DURING salary negotiations
If it's clear that you're being offered a job and now your negotiating partner is asking you about your salary history so that he or she can put together a compensation package that will entice you to say yes, you have a couple of options:
Do your research, know the market range, make the first offer and anchor high. For example, "Given my skill set, training, and experience, $____ is a reasonable salary."
Avoid the question and get the employer to make you an offer. You can say something like this, "The pay in my last role isn't very relevant here because it was for a very different role and set of responsibilities. I'm willing to consider a competitive offer."
When you receive the offer, don't accept it. Negotiate and counteroffer with 10 to 20% more (or the appropriate number based on your research).
Option #1 puts you in the best bargaining position. It takes courage to do it, but if you do your research and practice what you're going to say, there's no doubt you can pull it off.
Questions about salary history will soon be ancient history
When you avoid giving your salary history, you gain the leverage you need to successfully negotiate your true market value – and close your own personal wage gap, as well as the national one.
Someday we won’t have to worry about the dreaded salary history question, as all states will have followed Massachusetts smart lead by making questions about salary history relics of the past -- just like “do you plan on having any kids?”