Major US companies are continuing to drop the practice of asking job candidates for their salary histories nationwide in response to the proliferation of state and local laws barring them from doing so. The Progressive Corporation plans to add more than 7,500 new hires to its workforce in 2018, and won’t be asking any of them about their prior salaries as part of the process of setting compensation, the company announced in a press release last week:
Progressive recently decided it would no longer ask applicants about their salary history. “We’ve always based our pay on market research,” [Chief Human Resources Officer Lori] Niederst said. “We hope this change will give candidates who apply for our jobs confidence that they will be paid based on what they bring to Progressive, regardless of whether their previous employers paid them fairly.”
The Ohio-based automobile and homeowner’s insurance provider currently employs more than 33,000 people in almost 400 offices throughout the US. The company plans to hire extensively this year in Austin, Cleveland, Colorado Springs, Phoenix, Sacramento, and Tampa. Only one of these locations (Sacramento, California) is subject to a law prohibiting employers from inquiring about candidates’ salary histories, but Progressive is dropping these inquiries everywhere.
Some other large, multi-state employers have recently done the same, including major financial institutions like Bank of America and Wells Fargo, as well as tech companies including Amazon, Cisco, Facebook, and Google. These companies employ significant numbers of people in places with salary history bans like California and New York City, so they may simply have decided to follow the rules of the most tightly regulated market in which they hire rather than having separate policies for different states and cities.
On the other hand, these employers may just have a finger in the wind and figure that since these bans are going to crop up in more areas—New Jersey, for example, is likely to ban them this year—they might as well stay one step ahead of emerging regulations that could eventually be enacted at the national level. Additionally, as pay transparency becomes more common and candidates enter salary negotiations with more knowledge (or stronger beliefs) about what they can expect to be paid, salary history is becoming a less valuable tool for employers, while ditching the question signals to candidates and the public that a company cares about closing pay gaps.