This week, a day after Equal Pay Day, New York City joined the city of Philadelphia and the state of Massachusetts in banning employers from asking about prospective job applicants’ salary histories. The New York bill was introduced in August of 2016 by New York City Public Advocate Letitia James. James argues that this measure will reduce the gender wage gap. She told the New York Daily News, “Asking for their previous salary information only perpetuates that discrimination. Being underpaid once should not condemn anyone to a lifetime of inequality.” In an interview with Money, James said that her office found that New York women experienced “$5.8 billion a year in lost wages” and that she believed it was imperative to put in place “policies that could address that type of discrimination, including but not limited to asking whether or not we’re doing businesses with companies that don’t have women on their boards or executive committees and the like.” We’ve written previously about what the gender wage gap is, and how it’s one of the most important issues still facing women in the workplace. After all, compensation is still the primary benefit of working in a job! Data from Payscale and other economic research shows that women are still being paid less than men for similar work, even controlling for years of experience and education levels. The difference when controlling for these factors may be small (by some estimates, 2-8%), but it’s still unexplained, which leads many to suspect that unconscious bias or discrimination is at play. Indeed, gender bias and/or workplace environments that don’t support women may be one of the reasons why women choose different (and generally lower-paying) jobs and professions or industries than men do in the first place. While the law was obviously created with good intentions, it doesn’t address every situation. For example, if you work at a company and are applying for another internal position, obviously your employer already knows your salary history. Therefore, this mainly benefits people who are looking for a new employer -- not just a new role.
New York City government employees already benefit from a similar law signed by New York Mayor Bill de Blasio last year. The current law gives employers in the city 180 days to comply. Workers who are asked about salary history can make complaints and offending employers may be subject to fines.
Women in certain industries face wider wage gaps than others and may be best poised to benefit if they’re interviewing for a new job. For example, a large number of women in New York work in the financial services industry, which is not ranked as one of the best industries for women within the Fairygodboss community. According to Glassdoor data reported by Bloomberg, finance is one of the industries with the widest gender pay gaps (at 6.4%).
Even if you don’t work in New York City, it’s heartening to know that similar proposals are being considered in state legislatures across the country. We hope the example of these laws working in a few leading locales will soon help level the playing field more widely across the United States.
Fairygodboss is committed to improving the workplace and lives of women.
Join us by reviewing your employer!