Amazon Won’t Ask Prospective Hires For Salary History Anymore
Amazon has banned its hiring managers from asking prospective US employees about their salary histories, according to a post shared on an internal company message board and reviewed by BuzzFeed News. Requiring job candidates to share their salary history “perpetuates pay discrimination from job to job,” according to the National Women’s Law Center.
According to Amazon’s message, which was posted Tuesday, hiring managers and recruiters can no longer “directly or indirectly ask candidates about their current or prior base pay, bonus, equity compensation, variable pay, or benefits” or “use salary history information as a factor in determining whether or not to offer employment and what compensation to offer a candidates.”
The instructions also explicitly ban the use of tools like LinkedIn Recruiter to estimate or otherwise ascertain an individual’s prior salary. According to an Amazon spokesperson, these rules were shared with all Amazon recruiters in the US, and apply equally to salaried employees like software engineers and hourly workers like call center employees. As of October, Amazon employed over half a million people worldwide.
“We think this is the right thing to do for our current and future employees,” said a company spokesperson in a statement.
Amazon’s decision follows the passage of several state and local laws banning employers from asking interviewees how much they’re compensated. California, where many of Amazon’s big tech competitors have their headquarters, passed a salary history law in October that went into effect at the beginning of this year.
Facebook is just one of a few tech companies that ended salary history inquiries at the beginning of his year, not just for roles in Silicon Valley, but for positions in all of its national offices, which include locations in Chicago, Austin, Boston, and New York.
Google also said it recently stopped asking interviewees about their current rate of pay for all US positions, and hasn’t used the information to determine salaries since 2016, according to a Washington Post op-ed in which senior vice president of people operations Laszlo Bock discussed how salary history inquiries contribute to pay inequality.
Apple and Microsoft did not immediately return a request for comment from BuzzFeed News on their recruiting policies regarding salary history.
Other places that have banned the question for all employers include Oregon, Massachusetts, Delaware, New York City, and Philadelphia. Amazon, which is headquartered in Seattle, Washington, said in its message to employees that it’s taking “a proactive stance” on the issue. The online retail giant is currently seeking a location for its second headquarters; Boston emerged as a frontrunner of that race at the end of last year.
The goal of removing an applicant’s salary history data from their application process is to make compensation more equitable. When an employer knows how much an applicant is currently making, it’s easier to figure out the lowest possible offer a new hire is likely to accept. And while it’s technically illegal to pay women less than a man for doing the same job, the US 9th Circuit Court of Appeals ruled last year that it’s perfectly fine if the reason for paying a woman less is that she made less at her last job. Given that women and people of color already tend to earn less than their white, male counterparts, this system only serves to further existing inequities. Removing prior pay data from the equation altogether makes it less likely that a new hire who’s already being underpaid will continue to be underpaid in a new position.
In its 2016 diversity report, Amazon said that both female employees and employees of color earn 99.7 cents per dollar that white, male employees earn. Apple announced in 2016 that it had achieved pay parity across genders, following similar announcements from Facebook and Microsoft. But Google has resisted releasing its pay equity data for years — and it’s now facing a court order to hand it over to the government.
But there’s still a long way to go. The vast majority of tech companies still employ far fewer women and people of color than they do white men, and they tend to have more managers and executives who are white and male; pay parity means people in the same roles are earning the same salary, but it doesn’t mean that female and male employees, or white and non-white employees, are on equal footing.
Data from Hired, a recruiting website, suggests that “about 63 percent of the time, women are offered lower starting salaries than their male counterparts for the same job at the same company,” according to CNBC. The same study found that black women in tech only make $.79 per every dollar a white man in tech earns. That’s compared to $.83 on the dollar for women of color in the labor force writ large.
Here’s the full text of Amazon’s announcement:
Salary Inquiry Ban
Several cities and states have passed laws prohibiting employers from using or seeking a candidate’s current or prior salary history. In response, Amazon is taking a proactive stance to be consistent for all candidates residing in, or applying to jobs in, the United States. Effective January 1, 2018, Amazon’s US Compliance Approach to Salary History Inquiry bans will prohibit all inquiries into a candidate’s current or past salary in the United States. Amazon will also prohibit the reliance on salary history information as a factor in determining whether to offer employment and what compensation to offer a candidate.
Guidance – What you can’t do…
Directly or indirectly ask candidates about their current or prior base pay, bonus, equity compensation, variable pay, or benefits
Use salary history information as a factor in determining whether or not to offer employment and what compensation to offer a candidates
Consider salary history information even if the candidate volunteers it.
Document a candidate’s current or former salary in any amazon recruiting systems or third party databases such as LinkedIn Recruiter, etc.
Ask or rely on a third party recruiting agency to ask a candidate for his or her salary history
Seek or use salary history of candidates who currently reside in the U.S. or U.S. territories but are being considered for roles in another country.
Seek or use salary history of candidates who currently reside outside of the U.S. but are being considered for a role in the U.S.
What you can do…
Discuss a candidate’s compensation expectations provided that you in no way prompt them for any data related to their current or past compensation.
Discuss competing offers the candidate may have
Discuss Amazon’s compensation philosophy
Salary Inquiry Ban FAQs
Q: What does “salary inquiry” mean? Does this include asking about things like benefits, employee perquisites, 401k plan, etc.?
A: Yes, the definition of “salary inquiry” is broad and includes all aspects of compensation (base, bonus, stock), as well as employee benefits and perquisites.
Q: At what point in the recruiting process do these laws apply? What if I am just doing general sourcing or networking for candidates (not tied to a particular requisition), and I want to ask the person for information on their current compensation, before I even know what location(s) the person may be interested in?
A: The laws apply even at the sourcing stage of the hiring/recruiting process. You should not ask any candidate regardless of what stage in the process they are in, for information relating to their current or prior compensation.
Q: What can I say to a candidate who voluntarily shares their salary history even if I didn’t ask for it?
A: As an interviewer, if a candidate offers up information regarding salary, say “Thank you, however Amazon does not use current or past salary data to make hiring decisions. You can discuss any questions you have about our compensation model with a recruiter.” You can continue your interview without documenting the data they shared or relaying it to others.
Q: What can I say to a candidate who informs me that they have received a competing offer?
A: We are not prohibited from discussing competing offers. However, to be sure the discussion is handled appropriately, you should refer the candidate to a recruiter to discuss any competing offers.
Q: As a hiring manager, I often rely on current compensation to justify an exception. How am I supposed to think about this going forward?
A: You will not be able to rely on current compensation to justify exceptional on-hire offers. You can continue to rely on factors such as salary expectations, competing offers, and other job and market-related factors. You should work with your recruiter to confirm what factors may appropriately be considered.
Charlie Warzel contributed reporting to this story.