07/01/2020

Create Pay Equity by Ending Salary History Questions

This is the single biggest step in establishing equity

Pay equity is hard to achieve. It took Starbucks 10 years of concerted effort to reach pay equity for employees of all genders and races in their U.S. operations. But new research shows that banning questions about salary history can help companies move more quickly and sure-footedly toward pay equity.

In a working paper published earlier this month, researchers from Boston University’s School of Law found that in states where salary history bans have been enacted, pay for those who switched jobs increased, on average, 5 percent to 6 percent more than for those who changed jobs in other states. But the boost was even larger for African Americans, who received increases that were 13 to 16 percent higher, and for women, who received bumps that were 8 to 9 percent higher, the study reported.

James Bessen, an economist who was the principal investigator in the study, said the “use of salary-history information perpetuates inequality.”

Please select this link to read the complete blog post from LinkedIn Talent Blog.