Asking Candidates About Salary History – Helpful or Harmful?

Questions about salary history may seem innocuous on the surface – simply a way for interviewers and HR recruiters to determine if they can afford prospective employees, screen candidates or negotiate salaries.

But upon further examination salary history questions can have harmful consequences especially for qualified candidates from equity-seeking groups such as women, workers of colour and people with disabilities. [1]

For example, right now, women are being paid less than men for work of equal value, with Statistic Canada (2021) confirming that women make 89 cents for every dollar men make. [2]

There are many reasons for this and many other reasons why workers, in general, could be paid low by previous employers that have nothing to do with an applicant’s skills or abilities:

• Experienced pay discrimination or other forms of workplace discrimination;
• Needed to work fewer hours or leave the workforce entirely to manage other priorities (i.e. school, elder care, childcare);
• Were laid off;
• Previously worked in a women-dominated occupation that has lower wages by virtue of being considered “women’s work”. [3]

Because previous compensation may reflect any of these factors (or several others that weren’t mentioned here), gathering information about salary history would not be an accurate measure of a worker’s value – and employers and HR recruiters should be careful to treat it as such.

While there are no official laws in Ontario preventing employers and HR recruiters from asking salary history questions, several states in the U.S. have enacted salary history bans. These bans effectively limit or forbid employers and recruiters from asking prospective employees about past pay and/or using this information in compensation decisions.

Applicants have greatly benefited from states that have these bans in place. For instance, whereas job changers typically saw hourly wage increases of just under 4%, average hourly wages for people changing jobs in states with salary history bans was up by 7.9% — a 4% improvement. The results were even more noticeable for women and Black workers, significantly reducing wage gaps in those states. [4]

Even if it is legal to inquire about an applicant’s past pay in Ontario, it may not be the best approach as it can preserve pre-existing pay inequities. Here’s what HR recruiters and employers can do instead:

1. Research the Role: Study the market so you can get an accurate picture of what the average salary range is for the position in your specific area. You may also want to consider how to talk about additional steps your organization takes to compensate workers outside of a paycheque. By ensuring your organization is on par with current market rates, you’ll help boost your brand’s image and strengthen the relationships with the people you end up hiring because they know they’re being paid fairly.
2. Be Transparent About Pay:  In Ontario, the Pay Transparency Act (PTA) received royal assent in 2018. The goal of the PTA was to eliminate gender bias in hiring and close the wage gap by making it mandatory for employers to list salary ranges on public job postings. But it was delayed indefinitely, and to this day the Act has yet to be enacted. [5]But you don’t have to wait on laws to be transparent about pay. Companies and HR can voluntarily disclose salaries – something that benefits employers and HR professionals too. For example, in one notable report, organizations that posted pay information on their job listings received 90% more applicants than organizations that didn’t. [6]
3. Actively Address Bias in Recruiting: Conduct anti-bias training for all hiring managers and HR recruiters to ensure bias blind spots are significantly reduced and your application and negotiation processes are fair. This is a key step for attracting a greater diversity of talent and ensuring hiring managers don’t undervalue prospective employees especially when negotiating salaries. [7]

As a jobseeker, here’s how you can respond if the past pay question is brought up during your interview.

1. Deflect or Reframe the Question: Remember, you are under no obligation to disclose your salary history. But if a hiring manager requests this information, you can politely decline emphasizing that you’d like to have a fair negotiation based on your skills and what you can offer to the employer.
2. Determine the Salary Range and Your Salary Expectations: Ask your potential employer about what the expected salary range is for the position first. Once they provide this information, they may ask you if it’s in line with your salary expectations. If it does line up, that’s great and you should let them know. However, in the early stages of the hiring process, if you aren’t ready to make a decision then say, “I’m gathering more information and will consider all reasonable offers.” This way you aren’t locked into a range you don’t deserve.
3. Do Your Research: Understand your market value by figuring out what your position earns. Websites like Glassdoor and Salary.com could help in determining what your job earns with your years of experience and where you live. You can also search Hire Authority, the exclusive HR job board for HRPA members and students.
4. Demonstrate Your Knowledge and Skills: Be confident about what you bring to the table and let your possible future employer know about past achievements or obstacles you’ve overcome. In short, know your value. [8]

[1] Newsweek: New Study Shows That Asking For Salary History Perpetuates Systemic Racism

[2] Statistics Canada: Pay Gap, 1998 – 2021

[3] Why Salary History Bans Matter To Securing Equal Pay

[4] Newsweek: New Study Shows That Asking For Salary History Perpetuates Systemic Racism

[5] Canadian Business: ‘People Work for Money’: Pay Transparency Is More Important Now Than Ever

[6] CBC: Young people ask for pay transparency in job postings, saying the deck is stacked against job seekers

[7] Bamboo HR: Understanding the Salary History Ban: Its Benefits and Limitations

[8] 3 Ways To Avoid Disclosing Your Salary During A Job Interview