By Mike Simpson
When it comes to uncomfortable interview questions, it’s hard to beat anything that asks about salary history. Usually, talking about pay is a bit taboo. Add to that the fact that prospective employers might try to use it against you, and the situation can feel a whole lot worse.
It’s normal for candidates to have trouble navigating salary history questions. Luckily, there are some approaches that can make it easier, as well as some legal protections that might work in your favor.
So, if you’re launching a job search and want to be ready to discuss (or avoid talking about) your past compensation, here’s what you need to know.
What Is a Salary History as It Pertains to the Job Search?
In the simplest sense, a salary history is a document that outlines how much your past employers paid you. Usually, it includes only a few details, including the company name, job title, and pay rate, either as an annual salary or hourly rate.
At times, a salary history may also include details about the benefits or perks you received. When approached that way, the document gives a better overview of your total compensation.
Now, your pay history isn’t the same thing as a salary requirement. If you’re asked, “What is your desired salary?” or “What are your salary expectations?” the hiring manager is trying to learn more about what you think is fair compensation for the role you’re trying to land, not details about what you made before.
Usually, there are two moments when a company might ask for your salary history. One, they might request it as part of the application process. Two, they may want that information after you’ve interviewed, especially if they are considering extending a job offer.
Why would a hiring manager ask about your previous compensation? Well, for a few reasons.
One of the biggest motivators is figuring out if what they are able to pay for the job aligns with your expectations. In the end, hiring managers don’t want to move forward with candidates who would never accept the job because the salary doesn’t make sense for them. So, they ask for compensation histories to see where you stand.
Another reason is that they are trying to learn more about what other companies offer for specific skills. It’s sort of like covert research. If an employer isn’t sure their salaries are in line with area norms, a salary history can help them figure it out.
Finally, a hiring manager may dig into your past pay to get leverage. When it comes time for the salary negotiation, knowing how much you used to earn works in the hiring manager’s favor. If you made far less than other people in the field, it could give them a chance to lowball you.
In some cases, the hiring manager may bet that by offering you a pay rate that’s a bit above what you made in your last job – even if it’s below the going average for the role – you’ll think it’s a good deal. If so, they get the skills they want for a bargain price.
Want to avoid getting lowballed? Then do your research. If you know what the average person doing that job in your area earns, you can counter an unreasonable offer. Plus, it helps you see what you’re worth, ensuring you can avoid bad deals.
Is It Legal?
Many candidates have heard about salary history bans. So, there’s a good chance you are wondering, “Is it legal for a hiring manager or company to ask about past pay?”
Well, whether it’s legal depends on where the company operates and where you live. In total, there are 19 states that ban the practice to some level, including:
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- Alabama
- California
- Colorado
- Connecticut
- Delaware
- Hawaii
- Illinois
- Maine
- Maryland
- Massachusetts
- Missouri
- New Jersey
- New York
- North Carolina
- Oregon
- Pennsylvania
- Vermont
- Virginia
- Washington
It’s also illegal in Puerto Rico. Plus, there are 19 city or county bans that bar the practice, at least to a degree. These include:
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- Albany County, New York
- Atlanta, Georgia
- Chicago, Illinois
- Cincinnati, Ohio
- Columbia, South Carolina
- Jackson, Mississippi
- Kansas City, Missouri
- Louisville, Kentucky
- Montgomery County, Maryland
- New Orleans, Louisiana
- New York, New York
- Philadelphia, Pennsylvania
- Pittsburg, Pennsylvania
- Richland County, South Carolina
- Salt Lake City, Utah
- San Francisco, California
- Suffolk County, New York
- Toledo, Ohio
- Westchester County, New York
The exact nature of the laws does vary. However, most focus on ensuring candidates aren’t forced to provide salary histories in most situations. If you’re in one of the areas above, then you’ll want to review your local legislation to see what protections are available.
It’s also important to note that there are two states that have laws that make banning salary history questions illegal. Both Michigan and Wisconsin have legislation that explicitly states salary history requests by private employers can’t be prohibited at the local government level.
All other states have no formal legislation dictating whether companies can ask about salary history. As a result, it isn’t illegal for them to request details about your past compensation.
Now, it’s important to note that many people don’t believe that asking about past salaries is fair or “right,” even in areas where it’s legal. Some argue that it’s used to perpetuate discriminatory practices or keep pay gaps in place.
Think about it like this; if your first job came with lower pay due to something discriminatory, you aren’t just stuck with a below-average salary then. Every salary you were offered after that position – if it was based on the pay you received before it – would also be behind. You’d essentially never escape the impact of the pay at that first job.
That point is actually the reason many places decided to enact laws against requesting salary histories. The hope was to avoid long-term pay discrimination, ensuring everyone was able to get back onto a level playing field no matter what happened salary-wise at a past job.
How to Handle a Salary History Request
Figuring out how to handle a salary history request can seem difficult. Luckily, it doesn’t have to be. If a hiring manager is asking for this information, here’s a step-by-step guide on how to approach the situation.
1. Review Local Law
Before you do anything, spend a little time reviewing local laws in your area and the company’s location about salary history requests. Why? Because there’s a chance that asking about your past compensation is illegal, and you won’t have to answer.
In some cases, this can be a little complex, especially if you work remotely and are considering out-of-state employers. Which laws apply (and which ones don’t) can be hard to figure out. However, it’s better to check it out in advance.
2. Review the Job Description
If your salary is requested as part of your application, take a close look at the job ad to see if it’s mandatory. If it is, you may have to submit one to be considered. Otherwise, it might look like you didn’t follow directions, allowing the hiring manager to discard your resume right away.
Essentially, in this case, avoiding the situation might not be possible. However, that doesn’t mean you can’t provide it strategically. How do you do that? Keep reading to find out.
3. Attempt to Pivot
In some cases, you won’t be asked for your salary history until you’re well into the hiring process. If the hiring manager asks for one during your interview or in a follow-up email, you may be able to sidestep the situation.
For example, if you’ve done some research and know what a fair pay rate for the job you want to secure looks like, you can use that information to your advantage. When they ask for a salary history, you can try to shift the conversation by focusing on what pay rate you’re after.
Something like, “I generally treat my past salary information as confidential. However, after some research, I’ve determined that a salary of $X to $X is typically for the role you’re filling, my skill set, and my experience level, and I would be comfortable in that range” could work.
Alternatively, you could try to be future-focused, replying with, “I feel that it’s best to focus on this opportunity over past positions. Every job is unique, so fair compensation in one role may not align with another. I would love to discuss this more once I’ve had a chance to learn more about the role.”
Now, this approach isn’t guaranteed to work. However, it does give you some potential chances to avoid the topic.
4. When They Insist
If the hiring manager insists on a salary history, then you have two choices. One, you can consider it a dealbreaker and remove yourself from contention. Two, you can provide an overview of your past compensation.
Which path is right for you is a personal decision. Only you know what you’re comfortable sharing, so go with that way.
5. Figure Out the Numbers
If you’ve decided that providing a salary history is in your best interest, always start with your pre-tax pay. After that, you may actually have a few options available.
If you worked in one position and secured raises while there, you can present a range that showcases that growth, or focus on the ending number. You can also provide precise figures or round off to the nearest $500 or $1,000.
One option is to keep it as open as possible. For example, if you’re annual salary was $74,000, you could call it “mid-seventies.”
Which option is best may depend on your unique situation. Just make sure that you’re reasonably accurate. Employers do verify salaries. If you’re way off base and they find out, you can probably kiss the job goodbye.
6. Create Your Salary History
Once you’ve settled on some numbers, you can create your salary history. In most cases, this will be a separate document, similar to how you treat a professional references list. That way, you can add it to an application when the need arises or provide it separately if it’s requested later in the process.
Salary History Template
If you need to create a salary history, using a simple template can be the easiest way to go. Here’s one you can use to create the document:
(Your Name])
(Your Address as Listed on Page One of Your Resume)
(Your Phone Number)
(Your Email Address)
Salary History (as a Section Heading)
(Job Title)
(Company Name)
(Start Date – End Date)
Salary: (Pay Rate or Range)
If you have more positions to include, repeat the information for each one. That keeps everything consistent and clear.
You do have the option of including additional details, such as information about bonuses or benefits. If that’s the case, you can use this approach for each job:
(Job Title)
(Company Name)
(Start Date – End Date)
Salary: (Pay Rate or Range)
Annual Bonuses: (Bonus Amount or Range)
Benefits: (Either the Value or an Overview of the Benefits Package)
At times, the extra information can work in your favor, especially if you took a lower salary because the bonuses and benefits were high-value. It shows that your total compensation was far more than your pay rate, and that may help you when it comes time to negotiate.
Putting It All Together
Ultimately, providing a salary history can be nerve-racking. But, with the information above, you can navigate the situation properly and successfully.
Good luck!
Co-Founder and CEO of TheInterviewGuys.com. Mike is a job interview and career expert and the head writer at TheInterviewGuys.com.
His advice and insights have been shared and featured by publications such as Forbes, Entrepreneur, CNBC and more as well as educational institutions such as the University of Michigan, Penn State, Northeastern and others.
Learn more about The Interview Guys on our About Us page.