This week, Iceland made it illegal to pay women less than men. But in the United States, a country without federal law to enforce pay equity, employers are turning to technology to help close the wage gap. One cloud-based tool is helping them get there.
HireRight, a software and services vendor that provides global employment background checks, drug and health screening, and electronic Form I-9 and e-verifications, recently changed its platform's default setting to exclude salary history verification. Employers who contract with HireRight for background checks and still want to verify salary history can opt to do so, but the company believes that eliminating salary history from a background check will encourage employers to base compensation on skill set, not on prior history.
The move is especially positive for women, who historically are paid less than men for similar work and who can bring that disparity with them when a new job pays them based on their previous salary, as opposed to the actual market value of their new position.
“The question of asking about a candidate’s compensation history perpetuates the wage disparity from employer to employer,” says HireRight President Jurgen Leijdekker. “We think it is best practice to not ask about that and ask about a candidate’s credentials.”
Less than 1% of HireRight’s 40,000 clients, most of which are large, multinational employers, are opting in to salary verification, according to the company.
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The change also opens jobs to a wider and potentially more diverse candidate pool, as job seekers who do not respond with a salary that falls directly within the prospective employer’s anticipated range — either too high or too low — often are eliminated from consideration altogether.
The Irvine, California-based company says it doesn’t advise employers on pay equity strategies but chose to change the default as a number of U.S. cities, states and territories consider joining Delaware, New York City, Puerto Rico, Oregon, San Francisco, Massachusetts and California in passing measures that bar employers from asking about their prior salary. International employers also are moving away from the verification process.
“What we’re seeing in the U.S. ultimately stems from a lot of the regulatory climate outside of the United States,” says Alonzo Martinez, HireRight’s in-house compliance attorney. “We see this being a major issue for employers in 2018. There’s no doubt this is going to slow. It makes sense to get ahead of this issue.”
