Excerpt edited and condensed from NYTimes.com:
Massachusetts has become the first state to bar employers from asking about applicants’ salaries before offering them a job. The new law (effective July 2018) will require hiring managers to state a compensation figure upfront — based on what an applicant’s worth is to the company, rather than on what he or she made in a previous position. The Massachusetts attorney general is in charge of enforcing the new law.
The law looks to have a profound impact on the wage gap between men and women, but it will also have reverberations between employees and employers and the interview process as a whole. Federal law prohibits gender-based pay discrimination, but it is hard to prove.
Companies tend to set salaries for new hires using their previous pay as a base line, so by barring companies from asking prospective employees how much they earned at their last jobs, Massachusetts will ensure that the historically lower wages and salaries assigned to women and minorities do not follow them for their entire careers.
The distinguishing feature in the Massachusetts law is that job seekers will no longer be compelled to disclose their salary or wages at their current or previous jobs — which often leaves applicants with the nagging suspicion that they might have been offered more money if the earlier figure had been higher. People will still be allowed to volunteer their salary information.
This is a tremendous change in the interview process for both sides – employees and employers. First off, HR departments in Massachusetts (and more states have/will adopt this law in the coming years) need to be properly trained to no longer ask these questions. The new law opens up the HR department and companies for unfortunate lawsuits. Employers will have less leverage when it comes to compensation negotiations, but overall employee satisfaction will surely rise as employees will feel more properly compensated than before. Plus, the interview process may get a bit easier knowing the range beforehand, instead of the awkward back and forth that comes with the negotiation using previous salary as a baseline.
What do you think? Is this a good or bad law, and for what side of the negotiating table?