Salary History Bans & What To Do About It

Recently, I performed an informal poll of my LinkedIn connections because I was curious about a topic that has been of concern in the HR world. Each month, it seems there is more and more legislation restricting the ability to ask about previous salaries in the application and interview process.

While a win for employees, employers are facing an ever-tightening market of skilled labor and challenging hiring, even in the face of COVID-19.

Today, there are 19 states and at least 21 “local” bans by cities in the United States, but there are 2 laws against bans and one that is pending legal battle. Click here or the table below to see details!

So now, the question all employers face: if you are unable to ask about previous salaries, how can you ensure that you are finding candidates that fit what you are seeking to pay for the work you need? Nearly every hiring manager at some point has gone through weeks of interviews with a candidate only to have them turn down the offer because it’s too low.

The new salary compliance rules hinder companies even more. At endevis, we understand that these have been enforced to have equal pay and agree with equal pay, however, we need to proceed with caution with the following red flags.

The 4 Red Flags to Look For

1. Experience + Title = Pay Grade

Often, unemployed candidates interview a level below their previous job title while seeking a new opportunity. As the process moves forward, other opportunities present and the candidates change their minds as they interview for other positions. It is important to be cautious and ask the right probing questions during the interview process to weed out candidates who are looking for pay over cultural fit.

2. Competition in the hunt for talent

While you can’t ask about salary, there are no current restrictions on asking about other positions they are interviewing for. You should, however, be asking what other titles they are interviewing for and asking them to quantify how they expect to warrant their pay scale. However, if they tell you they are interviewing for VP or Director roles and your position is a manager-level, this should be a red flag that immediately prompts follow-up questions.

3. Company size, the company pay

Company size plays a significant factor in pay rates. A manager-level position at a Fortune 500 organization could pay as much as a director or even vice president title as a much smaller company. The location of work also plays a significant role in pay. What one makes in California, likely looks much different than Oklahoma. Also, be sure to track competitor companies benefit packages to ensure you can compete on more than just pay, closely examining competitors for paying pensions, profit share bonuses, and employee benefits. This can make a huge difference in comparing offers.

4. Speaking of incentives…

Although you cannot ask for a salary, you should ask this very important question: Is there anything that you will lose if you leave your job today? Things to keep in mind would be 401k, student loan education reimbursement, relocation payback, and pending bonus payouts. These could be immediate red flags.

Navigation is key

Don’t hesitate to use 3^rd party firms to help you find the best talent at the right price. They have access to many tools and technology that they can provide you and your organization to see what range you should be in for specific skillsets down to the zip code. Check out what Hector Godina, a Director of Global Quality at Haldex, had to say about his experience utilizing “headhunters” to assist in the recruitment process.

At endevis, our team has a wealth of experience in working across manufacturing, supply chain, health care, accounting, finance, and technology. We have placed thousands into many different jobs, locations, and companies and gladly offer resources for free like pay reports.

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