Did you know that 19 states and 21 cities have banned employers from asking about salary history? What you don’t know can hurt you financially forever!
A salary history ban prohibits prospective employers from asking about your current or prior salary. In some states it also requires employers to provide a pay scale or pay range for the position upon request. These laws were enacted to provide greater pay equity to women. According to recent census data women earn $0.82 for every $1 a man makes.
Why is this so important?
As a candidate you want to negotiate the highest possible salary but employers want to offer the minimum salary needed to fill the position. Employers ask for salary history as a way to determine what to offer a candidate, which often ranges just 5-10% above the candidate’s current salary.
Basing salary on prior salary rates perpetuates wage inequity, which is compounded over time. A woman who earns $10,000 less than her male counterpart will end up earning $407,000 less over the course of a 40-year career.
Even if you live in a state where a salary history ban is in place at some point in the course of the interview process you will be asked about salary requirements or expectations.
This puts you in the drivers seat but can also be a bit of a conundrum. If you provide an amount lower than expected you may be offered a lower rate than what you could have gotten; on the other hand if you state an amount that’s above budget you may not be considered for the position.
How can you use this to your advantage?
Know your worth! The best way to set your own salary range is to use a salary calculator such as salary.com Factors such as education, experience and geographic location all make a difference here too.
When asked for your salary expectations you can state a range that you know is market competitive. Tip – always give a range vs. a specific number as this gives you more bargaining power e.g. instead of saying $80,000 you can say you’re in the range of $85,000 - $90,000. Any offer you receive will likely be the lowest number you mention so be sure it’s a number you’re willing to consider accepting. Having a salary range helps you negotiate and find common ground more easily.
Be sure to factor in the value of any bonus, 401(k) match, vacation time or benefits into your calculation. In addition, ensure you know when annual pay raises or bonuses are awarded. Many employers require new hires to be in the position for a minimum before being eligible for a raise.
The first offer
Avoid accepting the first offer. Take 24-48 hours to evaluate and come back with your counter offer. Most employers have their own range in mind and will likely extend a first offer number that’s at the lower end of their range to allow for any counter. In addition, some employers have frozen hiring budgets during the pandemic.
The counter offer
It’s best to make any counter offer via email vs. phone or in person Sending it in writing gives the employer time to consider. Start out by expressing your continued interest and excitement about the position. Briefly explain why you are countering (use that research data) and how delighted you would be to accept.
Employers and recruiters like to close out candidate offers quickly once an offer is extended. Saying you would accept $x lets your future employer know that you aren’t going to drag things out and are ready to accept the position. Having already invested time and resources into posting the job, interviewing candidates and the cost of lost productivity for the time the job was open all put pressure on the employer to accept your counter offer.
While you are waiting for the employer to respond to your counter, consider the counter to the counter. What is the minimum you are willing to accept? Let’s say the original offer was $85,000, which was the low end of your range, and you proposed $90,000. Consider two possibilities: 1. That the employer will offer something in between or 2. May reject your proposal.
If the counter to the counter offer is below your minimum you have a choice to accept or walk away. Or… an alternative is to ask for something other than salary e.g. an extra week of vacation, flex time or a higher bonus as a compromise.
Get the offer in writing
If and when you reach an acceptable agreement, get the offer in writing including any special terms before you give notice to your current employer.
This article is part of our Money Moves series; job search and career advice to help you earn what you’re worth.
Arche helps people architect, navigate and advance their career path with expert advice and tools to support your job search, interview preparation, professional branding, salary negotiations, and career advancement.