Navigating Wage History Questions in Job Interviews

During a job interview, one common question employers may ask is about your previous salary. While this can seem straightforward, it can actually be a strategic move to low-ball you and offer a salary based on your prior earnings rather than the role's market value. Understanding the reasons employers ask about your wage history and how to handle this situation can be crucial for your negotiation and negotiation outcomes.

Why Employers Ask About Wage History

Employers often inquire about wage history for several reasons. One of the primary reasons is to ascertain your market value and set a salary accordingly. By knowing your previous salary, employers can understand the range they need to offer to attract or retain you. However, disclosing your wage history can unintentionally place you at an economic disadvantage, as it is based on past circumstances that may not reflect your current value.

Another reason employers ask about wage history is due to the belief that it reflects your competency and worth. Some companies operate under the notion that your past salary is an indicator of your market value. This is problematic because it can perpetuate the status quo and prevent fair compensation based on the current role.

Consequences of Revealing Wage History

Disclosing your wage history can have significant consequences. In a scenario where you belong to the same industry, revealing your previous salary might lead to a low offer. If you decide to end the interview at this point, you have avoided a potentially problematic situation. Alternatively, if you are applying for a different role with different responsibilities, mentioning this can help you negotiate a fair salary based on the role's actual value.

Legal Regimes and AB168

In response to these issues, many states in the United States have enacted laws prohibiting employers from asking for wage history. This is primarily due to the fact that an individual's current salary should not be predetermined by the past job they held, especially if that past job was lower-paying due to external factors like economic downturns or personal circumstances.

A notable legislation is AB168 (Assembly Bill 168), which requires employers to provide a pay scale for a position upon a reasonable request. This regulation puts a dent in the information asymmetry that has historically given employers an unfair advantage in setting salaries.

Sample Conversations

Pre-AB168 Conversation:
ShettieCorp: Ah, it looks like you are a great fit for the role! So, what's your current and previous salary?
You: Uhm, do I really have to say it?
ShettieCorp: Yeah, sorry, ShettieCorp policy.
You: Ok, I make 50k/yr but I had to take this job because my previous one went under, and I had hungry mouths to feed. I believe my market value should be 85k/yr, and that's why I am looking to switch.
ShettieCorp: Perfect! We will get you 56/yr and our awesome ShettiePlan health benefits package. We know the market value is 85k - 96k/yr, but this guy makes nearly half that, so he will take it, and we just got a bonus too!

Post-AB168 Conversation:
ShettieCorp: Ah, it looks like you are a great fit for the role! So, what's your current and previous salary?
You: Per AB168, this is an irrelevant question. Further, what's your budget for the role?
ShettieCorp: We know the market value is 85k - 96k/yr.
You: Ok, I believe my market value should be 85k/yr, but you just asked me a question that makes me balk at your competency about being aware of the rules in the state you operate in. I’m afraid you might be a difficult employer to work for, so I will work for you at 92k/yr.
ShettieCorp: Perfect! We will get you 91k/yr and our awesome ShettiePlan health benefits package.

Conclusion

Understanding the reasons behind wage history inquiries and the legal protections available can be instrumental in navigating job interviews successfully. By leveraging the knowledge of laws such as AB168, you can effectively negotiate a fair salary and avoid being undervalued based on your previous earnings.