Here's a question you should never ask -- especially in a job interview: "What is your salary history?"
As an employer, maybe you think you want to know the answer. (Or maybe you're way ahead of me and you know not to ask this.)
Or maybe you think, "but, that's how I'll know how much of a salary to offer if the fit seems right."
Problems: it's self-defeating, and often against the law. Let's start with why you shouldn't want to ask this, no matter what the law says.
It's because it's what I call "negative information." That means tempting but irrelevant data that can lead you to make an inferior decision versus what you'd decide if you hadn't know it at all.
Quick analogy: Suppose you're single, and you you met the man or woman of your dreams. But, then someone tells you that they think the object of your affection has a boyfriend of girlfriend. So you back off.
My heart breaks already. You'd be so much better off asking for a date -- and either falling on your face or succeeding, but at least knowing you'd tried. That extra info -- "oh, sorry, he or she has someone already" -- who knows if it's true, or if it's serious? -- leads you to bail out.
Same thing here, just a different context. The additional information about salary history leads to bad decisions. Also, increasingly, it's illegal (more on that in a minute).
First, let's explore outcomes. Suppose you're interviewing someone. If you ask what their salary history is, I can see seven potential results:
- You ask. The applicant declines to answer. It turns out you live in one of the states or cities that prohibits asking. You get dragged into some kind of legal action. At best, it turns into a big distraction for your business.
- You ask. The applicant answers. You don't hire him or her. Again, it turns out you live in one of the banned states or cities, and the applicant claims you didn't hire him or her because of the answer to the salary question. Distraction, only doubly so.
- You ask. The applicant either does or doesn't answer, but doesn't like that you posed the question to begin with. You breathe a sigh of relief as you realize it's not a prohibited question where you live. But then the applicant takes offense, slams you and your company in a Twitter post calling on wherever you live to ban the question, and the whole thing goes viral. Your company is now located on Boycott Boulevard, in Distraction City, USA.
- You ask. The applicant answers. The law doesn't matter. You realize you might be able to pay less than you had expected because his or her salary history is low, and you offer the job. She accepts, things work out great -- and then a year or so later she realizes just how badly you're underpaying her, and she quits. Now you have to start all over.
- You ask. The applicant answers. Again, either it's not illegal where you work, or you won't get caught. But, the law doesn't matter because the applicant knows she's been underpaid, and she takes offense when you make a low ball offer. You lose the candidate.
- You ask. The applicant answers. You make the offer you would have made anyway. But now you've subconsciously outsourced your hiring decision. Even by asking you're looking for social proof and validation from some other employer. It's a viscous circle, and you wake up in the middle of the night feeling like a fraud. But you're not really sure why.
- You don't ask. You make a hiring decision based on merit, and offer compensation based on what you think the employee is worth, not what you think you can get away with. Maybe it's not enough, and the applicant turns you down.
Best case of all: You don't ask, but she accepts your offer, and everything works out great.
Either way, you've picked the only one out of seven options (really eight) that actually improves your situation -- because you didn't clutter it up with negative information.
I am sure some people reading this don't agree. They only want to know where asking this question is legal and where it isn't. To answer that, here's a summary. It's bare bones, so please assuage my conscience here by promising that if you insist on asking, you'll run it by a lawyer first.
Here's where we stand, as best as I can tell from public sources and places like HR Dive:
Alabama (goes into effect Sept. 1)
Technically it's not illegal to ask in Alabama by my reading, but it would be illegal to take any negative action based on an applicant's answer or refusal to answer. Which tells me you're better off not asking.
Pretty close to a flat-out ban. Consult your lawyer to be sure.
Colorado (goes into effect Jan. 1, 2021)
Pretty close to a flat-out ban. Consult your lawyer to be sure.
Flat-out ban, but doesn't ban you from listening if the candidate offers the information. Still, talk to a lawyer.
Close to a flat-out ban on asking, but you are allowed to verify information provided by a candidate. Again: Get a lawyer.
City agencies can't ask for salary history. It looks to me like the law says private employers can ask, but get local legal advice before doing so.
Flat-out ban, as far as I can tell, except that you can use salary info regarding internal applicants.
Illinois (goes into effect Sept. 29)
Flat-out ban, by my read of the law.
Certain city agencies only. Ask a lawyer.
New Orleans city agencies only. It seems like it's still legal for private employers, but check to be sure.
Maine (goes into effect Sept. 17)
Employers cannot ask about salary history until after an offer has been negotiated.
Montgomery County government agencies only. Went into effect Aug. 14.
Flat-out ban, it would seem.
Looks like a flat-out ban here, too.
Flat-out ban for all employers with six or more employees.
State agencies and offices banned now; all employers as of Jan. 1, 2020
Same as New Jersey, mostly: State agencies and offices banned now; all employers as of Jan. 1, 2020. Also some municipalities have bans.
Stage agencies are banned from asking the question.
A mishmash of laws here, but it looks like some employers in Cincinnati and Toledo are banned from asking, at least as of next year.
State agencies can't ask. Some employers in Philadelphia and Pittsburg are restricted, too.
Pretty close to a flat-out ban.
At least two cities ban the question for government employment.
Applies to Salt Lake City agencies.
Flat-out, state-wide ban.
Flat-out ban. There are also other restrictions for employers with more than 15 employees.
Complete opposite examples
Michigan and Wisconsin actually enacted reverse bans that stop cities from prohibiting employers from asking, at least in some cases.
But honesty, it shouldn't answer. Just don't ask the question.