Ask an HR Pro: Can You Ask Applicants for Their Salary History?

Hiring the right person involves a lot of moving parts, and compensation is one of the trickiest pieces of the puzzle. You want to offer a competitive wage that attracts the right talent while staying on budget.

Naturally, finding out what a candidate made at their last job seems like a simple way to figure out what to offer them. But the legal landscape around hiring and compensation is shifting rapidly. Asking about past pay can create major legal headaches for your business.

We sat down with Mary Norman, HR Business Partner at iHire, to get the answers you need to keep your hiring process fair, compliant, and competitive.

Can You Ask Applicants for Their Salary History?

When interviewing a promising candidate, you might be tempted to inquire about their previous paychecks. So, can you ask applicants for their salary history, or is it illegal to ask for salary history?

“Many states and cities have passed salary history bans prohibiting employers from asking about a candidate’s past compensation," said Norman. “Best practice is to avoid asking altogether, even where it’s legal. It can perpetuate pay inequity and expose your organization to risk.”

Relying on past wages to set a new hire’s pay often carries over historical pay gaps and disproportionately affects women and minorities. Fixing these inequities requires a forward-looking approach to compensation rather than a backward glance at old pay stubs.

Asking for compensation history can also immediately turn off highly qualified candidates who value privacy and fair compensation practices.

What Is a Salary History Ban, and Which States Have Them?

A salary history ban is a law that restricts employers from asking candidates about their current or past compensation. These laws are designed to end the cycle of wage discrimination. They force employers to base job offers on the applicant’s skills and the market value of the position.

“In order to stay compliant, be sure to check the laws in your location since they change frequently,” Norman noted.

States with state-wide bans right now include:

• Alabama
• California
• Colorado
• Connecticut
• Delaware
• District of Columbia
• Hawaii
• Illinois
• Maine
• Maryland
• Massachusetts
• Minnesota
• Nevada
• New Jersey
• New York
• North Carolina
• Oregon
• Pennsylvania
• Rhode Island
• Vermont
• Virginia
• Washington

Because remote work allows you to hire talent from across the country, a salary history ban in a candidate’s home state might apply to your hiring process. Failing to comply with a salary history ban can result in steep fines and legal action.

Can You Ask Applicants for Their Desired Salary?

If past pay is off the table, how do you make sure you and the candidate are on the same page financially? Can you ask applicants for their desired salary?

“Yes, and it is recommended,” said Norman. “Asking what their salary expectations are for the role or what compensation range they are targeting is appropriate, and helps you determine if their expectations align with your budget.”

When you ask about their desired salary early in the screening process, you save everyone time. Just make sure you are prepared to share your own compensation range if the candidate asks for it in return. This mutual transparency fosters a positive candidate experience and sets a great tone for your working relationship.

What’s the Best Way to Determine Fair Salaries for New Hires?

Setting the right pay requires strategy and research.

“In order to determine a fair salary for a new hire, you should use market data for your industry and location as well as internal equity. Compare salaries of current employees in the roles you’re hiring for to avoid pay compression,” Norman advised. “This happens when new hires make significantly more than long-term team members.”

You need a solid foundation to extend offers that attract top candidates and protect your company’s long-term financial health.

“Establish a salary range with a min/mid and max. Also consider other compensation that’s not monetary, but still a factor,” continued Norman. “For example, bonuses, benefits, flexibility, and growth opportunities could all be highly valuable to your candidates.”

Sometimes, a perk like excellent flexibility will win over an applicant whose desired salary is slightly higher than your maximum budget.

Building a Fair and Compliant Hiring Process

Understanding the rules around compensation is essential for any HR professional or business leader. Can you ask applicants for their salary history? You might be able to in some places, but doing so is a risky move that can harm your workplace culture and your employer brand.

By focusing on a candidate’s desired salary and using objective market data, you can create equitable pay structures. This approach not only keeps you compliant with every new salary history ban, but also proves to your team that you value their true worth.

Want more expert guidance on compensation strategies, compliance, and beyond? Explore our Employer Resource Center today, or schedule a free consultation with Norman and our team of HR pros to get personalized support.