Illinois’s new law prohibiting companies from seeking information about the prior salaries, wages and benefits of job candidates went into effect on September 29. The law presents an opportunity to advance gender inclusion and equity in Illinois workplaces. Chicago HR leaders are well-positioned to ensure that this law has its intended impact, and that companies implement other steps to close the gender wage gap.
Cultivating inclusive and diverse workplaces is a central mandate of talent management. Different perspectives and experiences bring a richness of ideas and creativity that increase the bottom line. Recruiting and retaining the talent we are seeking requires an eye toward building fair, equitable workplaces. HR professionals are in a unique position to advocate for policies and practices that ensure fair compensation, eliminate unconscious bias and make sure every person has the opportunity to excel.
That’s why the “no salary history” law in Illinois can serve as a great jumping-off point for addressing and eliminating gender bias in the workplace and fostering a more inclusive culture. How inclusive a workplace feels reflects the degree to which employees are respected, valued and supported as full participants in an organization — and how employees are compensated is a key factor. The practice of using past salaries to determine future pay is one of the factors that contributes to persistent gender wage gaps. In Illinois, women earn an average of 81% of what men earn. The discrepancy is even worse for black women, who earn 63%, and Latinas, who earn just 49%. Basing offers on previous salary history means that any pay discrimination a woman has faced in previous jobs follows her, no matter the intention of her new employer.
This new law will help to close the wage gap, but it will not eliminate it completely nor will it address other ways that gender bias can creep into the workplace. HR professionals connect the dots between workplace policies and practices, and the vision of providing equitable opportunities throughout a firm — encouraging productive, motivated employees to stay, and attracting the best candidates for new opportunities. Here are a few things employers can do:
- Offer salary ranges upfront and be open about wages. Knowing salary ranges can help candidates and employees understand whether they are being paid fairly, as well as help them make informed decisions about whether a position meets their needs.
- Conduct regular pay audits and advancement analyses, address any compensation differences, and publish progress reports. Companies can analyze pay equity within their workplace to ensure there is not a gender wage gap in the organization or to understand the gap and take action to address it. The analysis should extend to hiring and promotions, which includes evaluating recruitment, retention and advancement practices to make sure that decisions are based on skills, experiences and qualifications, rather than biases or barriers.
- Analyze compensation decisions before they are finalized. Unlike the popular belief that women don’t negotiate, women do ask for raises just as often as men … they are simply less likely to get them. In fact, there is evidence that a gender bias influences how employees negotiating their salaries are seen. For example, when women negotiate for higher salaries, people may react more negatively than they do to men. Evaluating compensation decisions before they’re finalized may help to disrupt the impact of this bias.
- Implement policies such as paid family or medical leave that recognize the caregiving role that many employees — women and men — play in their families. At some point, nearly every employee will need to take time away from work to care for a new child, or to deal with serious personal or family illness.
Tackling pay equity is a critical element of building a diverse and inclusive workplace, and implementing the “no salary history” law is an important place to start. But, there are even more opportunities to cultivate inclusion. It is not only about ensuring fairness and equity. As HR leaders know, a diverse and inclusive workforce is a critical piece of a thriving business as well.
Tags: Diversity and Inclusion , Legal , #MeToo , Women , Illinois