If a Law Bars Asking Your Past Salary, Does It Help or Hurt?
(Alternatively, employers may try to get the information in slightly less direct ways,
like asking candidates about their minimum salary expectation, Mr. Klein said.)
How should we set compensation now that we don’t do it this way?’”
At Dime Community Bank, which employs about 400 people at 29 branches in the New York City area, the standard job application
asked candidates for their salary history until shortly before the New York ban took effect in October.
“It makes business sense.”
Several economists said a ban on questions about salary history would probably prompt such employers to engage in what’s known as statistical
discrimination — relying on group averages in place of information they were previously able to obtain about an individual.
In effect, employers may also be using salary on the front end of the hiring process — to help determine
whom they want to interview — rather than solely on the back end, when preparing an offer.
By asking what the candidate currently makes and paying the same or slightly more, an employer may simply want to ensure
that an offer is accepted and that the new hire is satisfied — but may be oblivious to the risk of perpetuating pay disparities.
