Written by Salary.com Staff
August 8, 2017
Delaware and Oregon just joined Massachusetts, Puerto Rico, New York City, California, and Philadelphia in passing pay equity legislation. They recently enacted laws that prohibit employers from asking job applicants about their salary histories. Why is asking about pay history a problem? Because it’s perpetuating a long-standing gender wage gap.
This practice is outdated and problematic because it can lead to employers paying women less than men. A 2013 study by the American Association of University Women found that women earn 6.6% less than men in their first jobs. This gap can widen over time if women are constantly underpaid based on their previous salaries.
Companies should base job offers on the value of the position and the candidate's skills and experience. This will help to ensure that everyone is receiving fair pay, regardless of their gender.
Eliminating salary history from the interview process will force employers to turn to market data when making their offers. This is a major shift in hiring practices to some organizations.
The bans on asking about salary history are an important step in the fight for equal pay. Although the gender wage gap has narrowed in recent decades, women still make 83 cents for every dollar that men make. These laws are a sign that lawmakers are finally taking pay inequity seriously and are working to close the gap.
Public-policy solutions will certainly combat wage disparities. But employers can also take steps to promote pay equity. The biggest step is to take a hard look at their own compensation programs to check for any pay parity issues.
Employers should talk to employees who are receiving different salary for the same job, either intentionally or as a result of misguided practices, to make sure they are receiving fair pay. Pay transparency helps ensure fair pay. Employees who feel valued and can talk to their employer about pay are less likely to leave. This is important for employers as it helps them keep employees in today's competitive job market.
To summarize, pay equity legislation is important to ensure fair pay for all workers.. While there are challenges to implementing pay equity legislation, the benefits of doing so far outweigh the costs. It would close the gender pay gap, improve the economic security of women and families, and strengthen the economy.
The fight for pay equity is a long and ongoing one. However, with continued advocacy and action, we can make progress towards a world where all workers are receiving fair pay for their work.
Download our white paper to further understand how organizations across the country are using market data, internal analytics, and strategic communication to establish an equitable pay structure.