By Claire Cain Miller

Several states and cities have ordered employers to stop asking about salary history.

Aileen Rizo was training math teachers in the public schools in Fresno, Calif., when she discovered that her male colleagues with comparable jobs were being paid significantly more.

She was told there was a justifiable reason: Employees’ pay was based on their salaries at previous jobs, and she had been paid less than they had earlier in their careers.

Ms. Rizo, who is now running for the California State Assembly, sued. In April, the United States Court of Appeals for the Ninth Circuit ruled in her favor, saying that prior salary could not be used to justify a wage gap between male and female employees.

It’s the latest sign that this has become the policy of choice for shrinking the gender pay gap. Several states, cities and companies have recently banned asking about salary history. They include Massachusetts, California, New York City and Chicago, as well as Amazon, Google and Starbucks.

Women continue to earn less than men, for a variety of reasons. Discrimination is one, research shows. Women are also likelier than men to work in lower-paying jobs like those in public service, caregiving and the nonprofit sector — and to take time off for children. Employers often base a starting salary on someone’s previous earnings, so at each job, the gender pay gap continues, and it becomes seemingly impossible for women to catch up.

“Women are told they are not worth as much as men,” Judge Stephen Reinhardt wrote in the Ninth circuit`s opinion, before he died last month. “Allowing prior salary to justify a wage differential perpetuates this message, entrenching in salary systems an obvious means of discrimination.”

What if job applicants don’t live in one of the places where asking about salary history is banned? Some experts recommend that they find ways to politely deflect, although refusing to answer an interview question can be risky. Workshops by the American Association of University Women suggest some strategies.

Applicants could turn the question back on the employer by asking for the position’s salary range, or what the last person to do the job was paid. Applicants could say something like: “I want to learn more about the job first, in order to have a better sense of my salary expectations.” Or they could provide context for why they’re declining to share the information, by explaining that it contributes to the gender pay gap.

Salary history bans can also have a less expected effect: When employers don’t rely on past pay as a proxy for how valuable someone is, they might consider a wider variety of candidates.A recent working paper was based on an experiment in an online job marketplace: Half of employers could see applicants’ past pay and half could not. The employers who could not see past pay viewed more applications, asked candidates more questions and invited more for interviews. The candidates they hired had, on average, lower past wages, and struck better deals when they negotiated.

The study was not representative of most hiring situations — the job marketplace was for short-term projects on which applicants bid — and the experiment was not assessing gender differences in pay. But it showed that employers over-rely on past salary as an indicator of productivity, and without that information, they try to learn about candidates in other ways, said Moshe Barach, a co-author of the paper and a researcher at Georgetown.

“It takes more effort on the part of the employer, but they get better outcomes because someone who might not have made it to Step 1 now gets a chance,” he said. “Employers talk to a person and might find they’re really smart and hire them.”

Salary history bans are too new for researchers to have studied their effects extensively. But other research has found that people are overly influenced by an opening bid, something social scientists call anchoring bias. This means that if employers learn an applicant’s previous salary and it’s lower or higher than they were planning to offer, it’s likely to influence her offer.

When other types of information have been hidden during job interviews, it has led employers to discriminate less. A study of symphony orchestra directors found that when people auditioned behind a curtain, more female musicians were hired.

But the strategy can backfire. Some research has found that ban-the-box policies, which prohibit employers from asking on job applications whether people have criminal records, resulted in fewer black and Hispanic men being interviewed or hired. One theory is that without the information, employers assumed they had criminal records.

The same thing could happen with salary history bans, critics of the new policies fear. Employers could offer women and other targets of discrimination less because they assume they were paid less. Or women with high salaries might volunteer that information in interviews, leading employers to think that anyone who didn’t share her salary had a low one.

Some business leaders have objected to salary history bans. The salary information helps them avoid interviewing people who would cost too much, they say. It can also help them avoid overpaying people whom they could hire for less, and it’s a way to find out how much previous employers thought applicants were worth. The Chamber of Commerce for Greater Philadelphia fought a salary ban passed in Philadelphia, and this week, a United States district judge ruled that employers could ask about prior salary — but could not set pay based on it.

But using prior salary as a shortcut in that way also perpetuates discrimination, said Linda Babcock, an economist at Carnegie Mellon who has studied gender differences in negotiation. “The new law could make employers more purposeful about deciding ahead of time what they believe the position is worth,” she said.

The salary history bans might spur other changes, by making people more aware of the problem, said Kate Bahn, an economist who studies gender and the labor market at the Washington Center for Equitable Growth. Employers might change the way they determine salaries or the way they respond to women when they negotiate, for example.

“That’s part of why it may be such a useful small tool,” she said, “because a lot of it is just sexism, and policy can help drive cultural shifts against sexism.”

Source:The New York Times