Transparency in pay is a rallying point of “fair pay” advocates. Why then would a recent law passed in Massachusetts prohibit questions about pay?
Ironically, what has been deemed the most robust equal pay law in the country simultaneously mandates the free flow of salary discussions amongst employees while prohibiting employers from asking potential hires about their past pay.
Under the National Labor Relations Act, most employees are already free to talk about their salaries, but Massachusetts’ new prohibition on employers is highly problematic.
When it comes to matching employees with employers, more information is always better. The more employers know about potential employees, and the more job seekers know about potential employees, the more likely there will be a successful match.
Previous pay indicates an employee’s value to their past employers. Often times, pay is even more telling than education or experience.
Withholding valuable information from an employer will only lead to wasted time, low-ball salary offers, and more job turnover.
Consider a sales associate position. Most employers provide similar base pay for their sales positions, but the most productive employees receive significant commissions that increase their total pay. If an employer is interviewing 10 potential employees who all have previous sales positions, but she cannot ask their pay, how is she supposed to know which employee has the most potential and what level of pay is appropriate for that employee?
Prohibiting employers from asking about pay history will lead to wasted time as employers will interview candidates that they cannot afford to hire.
Moreover, employers will respond to the lack of pay information by providing low-ball offers. After all, potential employees can always ask for higher pay, but employers can’t reduce their offer. Lower initial offers are not what fair pay advocates are hoping for—especially considering that women are allegedly penalized in salary negotiation (likely due to women tending not to push as much as men for higher pay).
And finally, if an employer makes too high an offer—one significantly above what the employee previously earned—there is greater chance that the employee won’t measure up to expectations and will be demoted or fired.
For employees, pay indicates the requirements and conditions of a job. For employers, pay indicates the value of an employee. For the same reason that potential employees should be able to ask the pay of positions they apply for, employers should also be able to ask potential hires about their previous pay.