Kim Keating
April 4—National Equal Pay Day—marks just how far into the year women must work to earn what men earned in the previous full year for the same jobs. As the National Committee on Pay Equity notes, “because women earn less, on average, than men, they must work longer for the same amount of pay.” In a sense, women worked the first 94 days this year for free.
But there’s a new glimmer of hope thanks to a little-known but breakthrough Massachusetts law that attacks a major factor in gender pay inequity: The use of salary history as a basis for salary future.
We all know the U.S. gender pay gap persists, in spite of heightened awareness and efforts of more enlightened employers. On average, women working full time are paid 20 percent less than men.
The post-Inaugural Pink Hat gathering in Washington and March 8’s nationwide Day Without Women underscored women’s crucial role in a strong, healthy country, economy and society. National Pay Equity Day spotlights the gender pay gap—affecting women of all ages, races, and education—and the work we still need to do.
Obviously, the first step toward closing the gender pay gap is to stop perpetuating it. A key but mostly hidden driver is that a woman’s lesser pay for the same work and value can follow her from job to job. When employers tie future pay to salary history—as many still do—it can compound the impact and set a woman back her entire career. Unfairly, past becomes prologue.
But fighting this pay-inequity driver is hard for individual women to take up. When a potential employer asks for salary history, candidates are under extreme pressure to give it up.
We’ve all been there: During the job interview process, often at the very beginning, the question of compensation arises. Talking money is always awkward. When interviewing, we’re supposed to be more interested in the job and bringing value to the employer than the exact pay. Yet the recruiter or HR rep had zero qualms about getting down to brass tacks and asking for salary history and current comp.
It’s a stressful dilemma. If we disclose our salary history, we’re giving up a negotiating position and possibly anchoring the employer’s offer to our current, below-market salary. If we demur, we seem uncooperative or have something to hide. Our fear is that suddenly we’ll be out of the running. Or someone with our experience and expertise who shares salary history gets the job instead.
Salary privacy advances pay fairness
No job candidate should have to disclose salary history as a prerequisite to continue the job interview process. It’s patently unfair. In any negotiation, the party that bids first starts off worse, and the results are hard to dig out from. Imagine working for years to build up to the salary you deserved from the start. Even so, an informal poll by Keating Advisors found that up to 70 percent of HR professionals and hiring managers ask job candidates for salary history.
But given how hard it can be to refuse to disclose salary history, a new frontier in pay equity laws and proposals will help.
First out of the gates is the Commonwealth of Massachusetts, which adopted a cutting-edge bipartisan pay-equity bill that goes into effect July 1, 2018. Developed with the state’s business community, passed unanimously by the legislature and proudly signed by Republican Gov. Charlie Baker, the bill was designed “to ensure equal pay for comparable work for all Massachusetts workers and equal opportunities to earn competitive salaries in the workplace.”
What makes the Bay State pay equity law stand out nationally as a model is a new provision that states: “It shall be an unlawful practice for an employer to seek the wage or salary history of any prospective employee from the prospective employee or any current or former employer.”
All I can say is, wow. The Massachusetts provision puts every job candidate—woman or man—in a stronger, fairer pay negotiating position that can affect their jobs, careers and families for a very long time.
Yes, other work issues matter beyond pay: Job and professional satisfaction … job security … a workplace that respects employees and their lives … an inspiring mission, vision, purpose and values … a positive, supportive culture … great leaders and managers … and the chance to lead, manage and grow. Add your own priorities. All have tremendous value. So does non-salary compensation.
But bank matters. Too many women shortchange themselves during that critical stretch in the job interview process when money comes up. The Massachusetts provision will help.
For now, since 49 other states don’t have gender-equity pay history privacy protections, here’s some advice and counsel: Take the wheel in salary talks. Let go of any insecurity or sense of powerlessness. Research and know the market data for the position. Don’t let past compensation hold you back. Let the market value and your worth be your guide.
Pay equity is everyone’s job
The promise of gender pay equality remains well ahead of the progress. Keeping the focus on gender pay disparity and solutions is important under the best political circumstances. But it is especially important now because first, pay equity laws have established a toehold that we need to expand and strengthen—not fall back—but also given that current political realities in Washington and many state capitals are, shall we say, less hospitable to progress.
The Massachusetts pay-equity law is a welcome model and challenge to the nation. By curbing the perpetuation of historically underpriced pay, women can push towards market-competitive compensation that reflects their market-competitive value. But this is not a gender issue. Organizations perform better when employers and employees both feel they got a fair, honest deal which becomes much more possible when compensation is fair and transparent.
As legislators like Massachusetts Senator Pat Jehlen and Representatives Ellen Story and Jay Livingston offer a new model for pay equity that includes pay history privacy, each one of us can do our part by standing up for ourselves at the pay negotiating table. Rep. Story has been working on “this small slice of justice” for almost 20 years. Let’s all help her bring a bigger slice the nation and all of us.
Kim Keating is president and CEO of Keating Advisors