Time to Say Goodbye to Salary History Questions?

Asking job applicants questions about their salary history is risky at best. In some situations (and locations), it’s simply illegal.

For example, the U.S. Office of Personnel Management (OPM) points out that 21 states have laws or executive orders that limit employers from using applicants’ salary history. Some states forbid asking salary history-related questions altogether.

The OPM recently released proposed regulations that would prohibit the use of previous salary history in setting pay for all federal employment offers. According to the organization, the proposed regulations would disallow federal agencies from considering job candidates’ salary history when determining pay for federal employees in the General Schedule pay system, Prevailing Rate pay system, Administrative Appeals Judge pay system and Administrative Law Judge pay system. The ban would not apply to employees in the Senior Executive Service, Senior-Level of Scientific or Professional pay systems.

The OPM’s announcement of the recommended regulations “builds on actions the Biden-Harris administration has taken to eliminate discriminatory pay practices and advance pay equity, including through Executive Orders that resulted in increasing the minimum wage to $15 per hour for tens of thousands of federal employees and employees of federal contractors,” according to an OPM statement.

The proposed ban also advances the administration’s goal of positioning the federal government as “a model employer for the nation and advance diversity, equity, inclusion and accessibility to attract a workforce drawn from the diversity of America,” the statement read, “consistent with President Biden’s Executive Order on Diversity, Equity, Inclusion and Accessibility in the Federal Workforce.”

Exacerbating Inequality

By asking about past pay, an employer or hiring manager may only be trying to determine what it considers to be a fair salary for a given role and candidate. But relying on a candidate’s prior pay “can exacerbate pay disparities for any worker who has faced discrimination in the labor market, while research shows that implementing salary history bans can narrow the gender wage gap,” according to OPM, adding that research also shows prohibiting salary history bans increases wages and reduces pay disparities for workers of color.

The Department of Justice Gender Equality Network (DOJ GEN) has been “historically vocal” on the topic of salary history questions as part of the hiring process, as Federal News Network recently pointed out, noting that the employee advocacy group has urged OPM to bar federal employers from considering salary history when making hiring decisions.

“Using salary history or a competing job offer to set pay means the federal government defers to what an unrelated company thought the candidate should earn, instead of the federal agency itself determining the value of the new employee,” DOJ GEN board member Liza Zamd told Federal News Network, saying she was “thrilled” to see a salary history ban included in OPM’s new proposed regulations.

OPM Director Kiran Ahuja is hopeful that the newly proposed regulations prove to be a significant step toward making the federal government a national leader in pay equity, saying in a statement that “relying on a candidate’s previous salary history can exacerbate preexisting inequality and disproportionally impact women and workers of color.”

With these proposed regulations, she said, “the Biden-Harris administration is setting the standard and demonstrating to the nation that we mean business when it comes to equality, fairness and attracting the best talent.”