Many cities and states prohibit employers from requiring job applicants to provide information about their salary history and total compensation. They may be able to ask about it in some states, so be sure to prepare answers that are firm and direct without coming off as disrespectful to your interviewer.
Many professional women have been asked a dreaded job interview question: "What are you earning in your current position?" as they searched for a new role. In 2017, however, some cities and states began to ban questions about salary history altogether in an effort to work towards pay equality.
As of 2021, 19 state and 21 local governments have made it illegal for a prospective employer to inquire about your past rate of pay. Advocates of these laws say that the only way to undo pay inequity is to stop basing a woman's future salary on her past compensation, which may have been decided using unfair pay practices. Instead, these laws hope to encourage companies to base salary offers on the requirements of the role and a woman's skills and achievements.
If you are interviewing for a new role, it's critical to go into the process understanding what is and is not OK for a potential employer to ask you about your past finances. Here, we break down the topic.
Can a new employer ask about my compensation at a prior company?
Laws on the subject vary from state to state but in most cases, it's illegal for an employer to ask employees about the details of any previous compensation. In New York, for example, Labor Law Section 194 prohibits an employer from asking either orally or in writing, personally or through an agent, for any information concerning an applicant's salary history, including compensation and benefits. The law took effect on Jan. 6, 2020.
In years past, it was common for employers to inquire about compensation from your previous job as a way to identify and disqualify applicants that may have been "too expensive." Employers also used this information to set compensation at the new position on par with what you were already receiving. The National Women's Law Center notes that such practices can be disproportionately harmful to women, who are more likely to have faced pay disparity at past positions.
In an attempt to address pay discrimination and further narrow the gender pay gap, many states, such as California, Illinois, New York and Pennsylvania, have enacted pay history inquiry bans for private companies. You can check HRDive.com's frequently updated library of state rulings for information on whether your specific state has a pay history information ban.
What can I do if I live in a state where my employer can ask about prior compensation but I'm not comfortable answering?
If you're asked about prior compensation in an interview, offer a salary range instead of giving your employer an exact number. If you prefer to give an exact number, be sure to include things like bonuses, stock options, and other benefits that paint a more accurate and complete picture of total compensation. Don't offer an answer that undervalues your experience or makes you feel uncomfortable. And, be sure not to lie. If you are asked a direct question about your salary history and choose to answer specifically, make sure the number is correct. Lying about or misrepresenting your salary or work history could be grounds for termination.
What questions can my employer ask about my compensation?
Your interviewer or new employer may ask you what salary you're hoping or expecting to get. Unfortunately, this question can perpetuate the pay gap, as women and people of color tend to set lower salary expectations and are less likely to negotiate the salary and benefits they're offered.
Be sure to do your research prior to an interview to determine the market value of someone in your position and with your experience and skill set. You can also turn the question on its head by asking your employer's budget range for the position. In select states, such as California and Pennsylvania, your employer is required by law to provide pay scale information if you request it. Before you go into your job interview, make sure you check the relevant hiring laws and regulations for your state (and be aware cities and counties may have their own specific pay history policies as well).
Can an employer ask about my credit history? Can it require a credit check?
The Fair Credit Reporting Act (FCRA) governs what information is accessible to employers. Employers must have written consent before pulling a copy of your credit history. And while federal law allows employers to check a prospect's credit, some states restrict how employers use credit information when making employment decisions.
If you're applying for a job that involves a security clearance or access to financial data, you should expect to be asked for written consent to allow the employer to pull a copy of your credit history. But, that history should not include your credit score.