Can’t Ask Salary: How Can Employers Know Candidates’ Worth?

Can’t Ask Salary: How Can Employers Know Candidates’ Worth?

Lynn Hazan & Rue Wang/ August 18, 2019

Illinois Governor Pritzker recently passed a law (reported in Chicago Tribune: August 1, 2019) outlawing employers from asking candidates about their current or past salaries. This ban is effective immediately. The penalty for asking about salaries goes up to $10,000. The new law puts the burden on hiring managers to determine the potential employee’s worth.

 Chicago Attorney Helen Bloch elaborated, “While it’s still fair game to ask candidates about salary expectations, employers should tread lightly around the topic. Importantly, there is no violation for the candidate’s voluntary and unprompted disclosure of wage information, as long as the employer does not consider or rely on the disclosure when making hiring or employment decisions.”

  •  How Can Employers Know Their Candidates’ Worth?

 –Understand the company’s salary distribution. Companies can collect information from internal salary data (payment history for all positions, salary history from previous interviews, cost of living increases, inflation rate) and estimate the salary growth rate.

Learn from Salary Surveys. HR consulting companies and professional associations conduct salary and compensation surveys. Their reports take into consideration educational and skill sets, geographic locations, industries, job titles, and levels of experience.

Exchange the information. Discuss with business partners/colleagues in the industry. Conduct benchmark studies.

Collaborate with recruiting agencies. Generally, experienced recruiting firms know about salary, benefits and bonuses. They can provide competitive data.

  • If Salaries Don’t Compete, What Can Employers Do?

 –Provide additional/other benefits, such as extra paid/unpaid holidays, remote working,

dental/visual insurance, daily commute/lunch subsidies, free online education programs, etc.

Negotiate salary based on the performance reviews every six months, fiscal year or anniversary dates.

Be flexible. Allow candidates to adjust working schedules or shorten working hours per day.