Futile NYC law bans asking job applicants about their salary history

posted at 8:01 am on May 5, 2017 by Jazz Shaw

Yesterday was apparently “Equal Pay Day!” but only in New York City. Similar to Tax Freedom Day, the actual Equal Pay Day was back on April 4th and was described as how far into 2017 women would supposedly have to work on average to earn the same amount of money a man in the same job would have made in 2016. (If you really want to tick off anyone celebrating this event, send them to read the Wikipedia Background section on the subject, which actually pegs it pretty well.)

The somewhat delayed holiday was observed in New York City in a very special way. Mayor Bill de Blasio signed into law a new rule which will forbid employers from inquiring about any job applicant’s salary history or current earnings. This bill was finalized through the legislative process back on the actual Equal Pay Day, but now it’s been signed off and is ready to go into effect in October. (CNN)

Mayor Bill de Blasio, a Democrat, signed a bill on Thursday that makes it unlawful for those involved in the hiring process to inquire about what an applicant currently makes — a measure that takes aim at the gender pay gap.

“This is about fixing a broken history. This is about overcoming years and years of discrimination that held people back,” de Blasio said at the signing ceremony.

The law will go into effect in October. In the meantime, businesses that look for talent in one of the country’s largest labor markets will need to reexamine their hiring practices.

“This will require employers to change their job applications, employ new practices in terms of hiring, [and] retool how they engage in the salary discussions with prospective employees, focusing on salary expectations rather than current salary,” said Kathleen McLeod Caminiti, a New York attorney with Fisher Phillips who represents employers.

Two things to take note of on this subject. The first is already well known but rarely discussed in political and media circles. The actual gender wage gap, as evaluated in this Pew Research study (among many others), is caused by a variety of factors, including differences in education choices, job and industry preferences, average work experience, length of the work week, salary negotiation styles and breaks in employment. Only a small percentage is attributed to actual gender discrimination.

But more to the point, even if you think that most of the wage gap is caused by discrimination, this law is essentially window dressing which does little or nothing to address it and actually limits the ability of highly qualified applicants to succeed while stifling the screening process for employers. Anyone with any experience running a business already knows what the prevailing wages in their industry are and they have a range in mind as far as what they’re willing to offer before an applicant shows up for an interview. Hiding what you are currently making isn’t going to change that. The only reason there is “a range” is because some employees are simply better performers and are more valuable to the business. From the applicant’s perspective, if they have really excelled in their field, one of the best ways to demonstrate that is by showing how highly valued they are at their current job. Keeping that information in the dark limits their ability to land the best positions.

From the employer’s side of the coin, it’s not just a question of identifying the best candidates, but also getting some sort of idea about those who might not perform as well. If the applicant is earning noticeably below the industry average, that may be an indicator that their current boss doesn’t have the same glowing evaluation of their performance as is portrayed on the applicant’s resume. That can apply to either gender and isn’t a question of discrimination. Perhaps a different part of the explanation is that the applicant (be they male or female) is a poor negotiator when it comes to making their salary demands. (A trait often ascribed to female applicants for whatever reason.) Is that “discrimination” or bias of some sort? Or is it simply good business? Once the employer has identified an applicant they would like to hire, there’s no point in forcing them to take more money than they are willing to accept. That’s a uniquely stupid business model and doesn’t speak well of the company’s long term prospects.

This new law addresses none of these issues and will only represent one more step in New York City’s ongoing campaign to make it harder to profitably do business there. We saw the same thing with their Ban the Box initiative, which restricts employers from finding out if they might be about to hire former felons. These feel good measures are no doubt great for pulling in a few more liberal votes on election day but do little or nothing to address underlying challenges in employment and wages.

If you really want to address the gender gap in wages, attempting to use government regulatory power to force all businesses to behave like identical, socialist style clones in a non-competitive environment isn’t the answer. Far better to promote educational initiatives for young women which encourage them to pursue academic majors which are geared toward launching careers in the best paying fields and include early training on aggressive negotiating tactics which will allow them to squeeze every dime they are worth out of a prospective employer. Sadly, that doesn’t fit in very well with a liberal mindset so we’re unlikely to see those sorts of efforts taking root in New York City any time soon.

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