Don't Get Asked and Don't Reveal…..
As of January, 2018, California employers will no longer be allowed to ask candidates for their salary histories. That’s right. You will no longer be required to disclose your current or past salary to get a job offer. A new law, AB 168, goes into effect designed, in part, to eliminate wage disparity in different races, sexes, or ethnicities.
This law follows similar new laws recently passed in New York, Pennsylvania and Massachusetts. Existing California law prohibits employers from paying employees at rates less than the rates paid to employees of the opposite sex for substantially similar work when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.
AB 168 does not prohibit applicants from disclosing wage history information "voluntarily and without prompting."
If candidates make a voluntary disclosure, the employer may use it to determine whether to extend a job offer or to decide what compensation to offer the applicant. However, such use is still subject to the Equal Pay Act’s caveat that prior pay cannot, by itself, be used as a justification for any disparity in compensation between employees of different races, sexes, or ethnicities.
The law also does not prohibit obtaining or using pay history information disclosable to the public under federal or state law.
This prohibition is codified at Labor Code Section 1197.5, which also provides exceptions based upon various factors, including a seniority system, a merit system, or any other "bona fide factor" other than sex, such as education, training, or experience.
Part of the rationale for this new legislation is an attempt to remove one more barrier to wage equality. The California Legislature found that the gender wage gap has not narrowed significantly in recent years and that in 2015, the gender wage gap in California was 16%. Wage inequality is even greater among women of color. Accordingly, the reliance by an employer upon an individual's prior salary to establish wage rates could perpetuate historical wage inequality. It’s not an overstatement to say that wage discrimination exists everywhere. In 2014, the Census Bureau reported that female paralegals earned 94% of what male paralegals earned.
The new law was created, in part, to prevent employers’ salary inquiries from perpetuating any discrimination that women or people of color have previously faced. When employers ask candidates about prior salaries, they hear a figure that anchors them and offer wages that keeps candidates at a salary that is already too low. Typically, employers are not motivated to offer a salary that brings a candidate up to market. They offer a certain percentage of the existing salary that may already be low. This is part of what prolongs wage discrimination. Being underpaid should not condemn you to a lifetime of inequality.
What are you likely going to see going forward?
Firms may publish salary ranges more often. Or, they will interview you and at the end of your lively little talk, they will tell you, “This job pays, $xxx.” It will be up to you to say, “That does or does not fit my salary requirements”.
They cannot ask you, “What is your current or past salary?” They can no longer judge you based on the percentage of salary increases you received in the past. They can't make up their minds whether you were a good employee by the amount of past increases you received nor whether they will give you an amount they feel you will be satisfied with simply because you were receiving similar increases in the past.
Furthermore, and most importantly, they can't keep you pushed down on the salary scale because you started out low and they won't bring you up to wage equality. Nor, can they prompt you to reveal the numbers. You can, however, voluntarily offer a figure. You might also answer, “I am looking for a salary of $xxx.” However, you do not have to reveal past nor present salary.
When you are working with a staffing organization, be open about what your number is. It’s very frustrating for a recruiter to present you with opportunities only to have you say, “No, that’s not it” while the recruiter presents job after job with the question, “Is this it?”, “Is this it?” I know few recruiters who will want to continue to work with you on that basis. They may ask you, “What salary would make you happy?” However, if you don’t give them a figure, they will simply move on to other candidates and not waste precious time.
Divulge Your Worth, Not Your Past
Know the market. What is relevant here is finding an appropriate job against which to benchmark the open position. Find a market price for the job you're applying for, and determine how close to that median you should be paid given your experience and accomplishments. What you made yesterday doesn't matter – what your peers are making today does.
Once you've found what the job is worth to the market, save the information for the offer segment of the interview. You'll be on solid ground if you negotiate from an informed position.
How are firms getting information as to what to pay?
Some firms are going to the associate compensation program, i.e., paying for years of experience in the field instead of paying for performance. In the past ten years, the field was headed toward the pay-for-performance model and moving away from paying strictly for years of experience. Previously, firms modeled paralegal wages on the associate program – paying for years of experience. For example, firms pay the graduating class of 2008 xxdollars with no regard for experience. Positions should be paid on pay-for-performance. That is, what experience and education is brought to the table vs. what duties and education are involved.
How to get your offer up
Employers should pay for skills that match the job description and years of experience. Perhaps you are in a situation where you are earning substantially more than the employer is willing to pay. Since you will no longer be required to disclose your salary, and if the salary offered is much less than you require, emphasize your expertise. Years in the field might not help you.
You may say, “I see that you require eDiscovery skills, expertise in Relativity and five years attending trial. Not only do I have all of that, I am also an expert in legal research, have drafted motions, pleadings and attended many high-profile trials for Fortune 1000 companies including……” Sell those skills. You can still negotiate.
The reason years in the field might not help is that you may be a 10-year paralegal but performing at the 3-year level i.e., Bates stamping, organizing documents, summarizing depositions. This isn’t going to get you more money. It’s all in the skill level, even if you are earning more than the job is originally slated to pay.
It will be interesting to see how this works. It might cause some confusion in the beginning as employers may not be able to get a handle on what the market is currently paying. Guesstimates may occur but somehow, I have a feeling this is a good step towards an antidote towards wage discrimination. Let’s hope so!
Chere Estrin is the CEO of Estrin Legal Staffing. She is also the President and Co-Founding member of the Organization of Legal Professionals and CEO of the Paralegal Knowledge Institute. She is the author of 10 books in the legal field, a Los Angeles Paralegal Association Lifetime Achievement Recipient. She is a former Paralegal Administrator for two major firms, an executive in a $5 billion company. She has been interviewed by the Los Angeles Times, Newsweek, Daily Journal, Above the Law, Forbes.com and other prestigious publications. Her blog, The Estrin Report, has been around since 2005. She has 3:00 – 5:00 a.m. on Sundays free and can be reached at firstname.lastname@example.org.