If a Law Bars Asking Your Past Salary, Does It Help or Hurt?<br />(Alternatively, employers may try to get the information in slightly less direct ways,<br />like asking candidates about their minimum salary expectation, Mr. Klein said.)<br />How should we set compensation now that we don’t do it this way?’”<br />At Dime Community Bank, which employs about 400 people at 29 branches in the New York City area, the standard job application<br />asked candidates for their salary history until shortly before the New York ban took effect in October.<br />“It makes business sense.”<br />Several economists said a ban on questions about salary history would probably prompt such employers to engage in what’s known as statistical<br />discrimination — relying on group averages in place of information they were previously able to obtain about an individual.<br />In effect, employers may also be using salary on the front end of the hiring process — to help determine<br />whom they want to interview — rather than solely on the back end, when preparing an offer.<br />By asking what the candidate currently makes and paying the same or slightly more, an employer may simply want to ensure<br />that an offer is accepted and that the new hire is satisfied — but may be oblivious to the risk of perpetuating pay disparities.
