Updated May 10, 2023 - Economy

Largest U.S. employer seeks to ban salary history questions in job interviews

Gender pay gap for U.S. federal civilian workers
Data: U.S. Office of Personnel Management; Chart: Simran Parwani/Axios

In an effort to close discriminatory pay gaps, the largest employer in the nation — the federal government —  wants to ban salary history questions from its own job interview process.

Why it matters: Relying on a job applicant's current salary to determine their pay offer can perpetuate unfair pay practices, scholars and gender equity advocates have long argued, effectively anchoring some candidates to lower wages throughout their careers.

What’s happening: The U.S. Office of Personnel Management, which oversees 2.2 million federal employees across the country, released a proposed regulation Wednesday morning that would prohibit federal agencies from using a job candidate’s current or past salary to determine pay in most federal jobs, as Axios first reported.

  • 21 states already either outright ban salary history questions or regulate them to some extent. If this proposed regulation goes through it could lead to more change — standards for the federal workforce often wind up influencing how the private sector operates.

Zoom in: The proposal has its roots in a 2021 Biden administration executive order on expanding diversity, equity and inclusion in the federal workforce.

How it works: Salary bands for federal workers are already tightly organized — applicants know the pay range for any given job, and there's a clear structure around promotions and wage increases.

  • But hiring managers do have the discretion to raise initial salary offers based on an applicant's qualifications. And for now, managers can use salary history — among other things — to make the case for higher pay.
  • Once the question is banned, managers can still make their case based on things like experience and skills, Rob Shriver, deputy director of OPM, tells Axios.
  • The new regulations would apply to the majority of full-time nonseasonal federal roles, about 1.5 million jobs, with some exclusions.

The big picture: Women in the U.S., on average, earn about 17% less than men — and that number has hardly budged for years. Because pay for federal workers is more transparent than in the private sector, the gender gap for federal workers is narrower — women are now paid about 6% less than men on average.

  • Gaps between people of color and white men look wider: Black men earn 15.6% less than white men, on average, in federal roles, per OPM's data. Black women earn 15.2% less than white men.

Reality check: The new rule doesn't deal with some of the biggest drivers of the federal workforce's pay gap — job selection, with women tending toward lower-paying occupations, and the fact that there are fewer women in higher-paying roles.

Still, regulators are optimistic. "What we think this will do is root out some of the historical pay inequities that are more prevalent outside of federal government," Shriver says. “We don't want to be bringing those into the federal government."

What’s next: The proposal will have to go through a 30-day public comment period before it’s finalized.

  • But, but, but: Federal employees have a more immediate concern — the debt ceiling.
  • When the U.S. government hits its "X date" — the point at which it won't have enough money to pay its debts, which could come as soon as next month — workers will be at risk of not getting paid at all.

Editor's note: This story has been corrected to state that the comment period is 30 days, not 60. It has also been updated to reflect that the U.S. Office of Personnel Management released the proposed regulation.

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