As more U.S. states and cities become forced to follow a law that bans employers from asking job candidates about prior salary, Amazon voluntarily pledged to ban the salary question, a policy that could potentially hurt female candidates, according to a Quartz report.
The law aims to correct the gender pay gap that has persisted as women's starting salaries continue to be based on lower previous salaries. California became the largest state to follow the law Jan. 1, joining Massachusetts, New York City, and other states and cities with similar regulations.
Here are four insights from the report.
1. When employers are unable to ask about a job candidate's salary history, they may make false salary assumptions, said Jennifer Doleac, PhD, assistant professor of public policy and economics at Charlottesville-based University of Virginia. "When we make them guess, it hurts the best applicants in the groups we're caring about, because we have no way to distinguish them, and they get grouped together with the rest," Dr. Doleac said.
2. Dr. Doleac pointed to the "Ban the Box" movement, a similar effort that aimed to deny employers information about a candidate's criminal history. The movement intended to help employment prospects for black men, who are more likely to have criminal records than white men. Employers made assumptions about black men that were different than those they made about white men when they did not know which applicants had criminal records.
3. Women who were paid well in previous jobs will have to negotiate the wage they already had if they are offered a lower salary at their new job, Dr. Doleac said. Women who are unable to prove they earned more, or are unwilling to haggle, will get less money, she added. Additionally, women who are not paid well will be in the same position they were in before the laws passed.
4. Since past salary disclosure presents legitimate uses for employers, whether as a bargaining tool or a way to see how a previous employer valued the job applicant, Dr. Doleac thinks there should be more salary disclosure, not less. Job candidates would be in a much better position for bargaining salary if they knew the range of salaries for their prospective jobs.