Recently, Massachusetts passed a law prohibiting employers from requiring job candidates to divulge how much they earned in their last position. Massachusetts is the first state to pass a law of this kind, which will go into effect in 2018. Although the new legislation was designed to help close the wage gap hindering women from earning as much as men, the law will effectively help people of all backgrounds who are seeking to advance their careers.
The logic behind the new law is compelling. People who start out their careers in low paying jobs have a hard time advancing to higher salaries if their pay is based on their previous salaries. This leads to a cycle of low pay that is difficult to break.
While this law may appear to hurt employers by eliminating one way to gauge what salary to offer a candidate, a much better way for employers to frame the question is to ask candidates about their salary expectations. This way, candidates can provide an estimate of their own value and experience without being held back by their current salaries. Savvy candidates who are asked about their salary history know how to deflect the question back to the employer by asking the interviewer what the salary expectations are for the role.
And ultimately, employers should resist using metrics that aren’t predictive of job performance when evaluating a candidate’s worth and potential salary. Previous salaries shouldn’t be an indication of a job candidate’s current, or future, worth as an employee. There is no research that we know of that says that a candidate’s previous salary is predictive of job performance in a new role, but there are plenty of other factors with proven correlations to job success. Aptitude tests (one of the most predictive hiring factors), work samples, resumes, work experience, recommendations, and education are all much stronger indicators of a candidate’s capabilities.
This law is yet another example of the concept of unconscious bias coming to the forefront in the hiring process. With more and more companies making a conscience effort to diversify their hiring efforts, understanding unconscious bias is a good first step. Blind hiring is one practice some companies are adopting as a way to minimize the effect that a person’s demographic information has on hiring outcomes. And using more objective or standardized measures to evaluate candidates, such as pre-employment tests, can go a long way in promoting fair hiring practices.
