As an employer, have you ever wondered whether you can ask a potential employee about their salary history during a job interview? Or alternatively, as an employee, have you ever wondered whether an employer can ask you about your salary history during a job interview? It is a question that is commonly asked, but is it legal?
In this article, we’ll explain whether employers can legally ask an employee for their salary history during a job interview, whether employees are required to answer questions regarding salary history, and answers to other frequently asked questions.
Read along!
Can employers legally ask for a potential employee’s salary during a job interview?
The short answer is yes. Employers can legally ask potential employees about their salary history during a job interview. Australian Anti-Discrimination legislation doesn’t ban questions that are used to gather specific information about a potential employee’s salary history. Additionally, Anti-Discrimination legislation also doesn’t ban employers from asking questions that can be used for them to determine an employee’s salary history.
Instead, Anti-Discrimination legislation bans questions in regard to other characteristics of an individual that aren’t relevant to whether they can perform a job. Although it can be argued that an employee’s salary history is irrelevant in regard to determining whether an employee can perform a job, anti-discrimination legislation doesn’t prohibit employers from asking questions regarding salary history.
In addition, Equal Opportunity legislation such as Victoria’s Equal Opportunity Act 1995 suggests that asking prospective employees for past-Salary history can be reasonably asked in a non-discriminatory manner. For example, an employer may choose to ask interviewees about their salary history in order to determine a fair market wage, and they can negotiate the market wage with employees during the interview process.
However, this could amount to discriminatory conduct under Fair Work Act 2009 if the interviewee finds a specific piece of evidence or has a reasonable belief that the interviewer was being unreasonable and unethical in their decision-making after discovering their salary history.
If it is found that an interviewer obtained salary history information for discriminatory purposes (such as forming a prejudice based or denying an interviewee opportunity), it would be illegal. Therefore, employers are generally advised to avoid asking an interviewee for their salary history because this question can be illegal depending on the reason it is being asked, and this is why there have been discussions about banning employers from asking about salary history.
In scenarios when employers ask about a candidate’s salary history, the best interests of the interviewer are balanced against the best interests of the business. A business may have an inherent bias in hiring quality employees at a lower salary because the business wants to save money. However, these claims are generally speculative and ambiguous.
Want more?
Sign up for our newsletter and be the first to find hand-picked articles on topics that we believe are crucial to successfully scale your unique small business.
By clicking on 'Sign up to our newsletter' you are agreeing to the Lawpath Terms & Conditions
Why do employers ask employees for their previous salary history during job interviews?
There are several reasons an interviewer may choose to ask an interviewee for their salary history. Two primary reasons include the following:
- A primary reason most interviewers ask an interviewee for their salary history during an interview is in order to determine the interviewee’s ‘market price tag’
- Interviewees also commonly ask an interviewee for their salary history so that they can negotiate a salary range depending on an employee’s skill level
If you are a prospective interviewee, we recommend that you check your employment agreement to determine whether there is a contractual term contained in your employment contract that prevents you from disclosing your past earnings and salary history to interviewers.
Additionally, you should check whether there is an enforceable and valid pay-secrecy clause in your employment contract that will prevent you from disclosing your current salary.
What is discrimination in interviews?
The Australian Human Rights Commission defines discrimination as when an individual or a group of individuals are negatively treated compared to other individuals or groups of individuals on the basis of their background or individual attributes.
For example, an employer might choose not to hire a qualified candidate on the basis of their race, and they will choose to hire an individual from a different race even if they’re less qualified for the position.
What can’t employers ask employees about during job interviews?
Section 351(1) of the Fair Work Act 2009(Cth) outlines the grounds on which employers are prohibited from discriminating against prospective employees on the basis of. These include the following:
- Race
- Colour
- Sex
- Sexual preference
- Age
- Physical or mental disability
- Marital status
- Family or carer responsibilities
- Pregnancy
- Religion
- National extraction or social origin
This section of the Fair Work Act is also supported by other legislative Acts, including the following:
- Age Discrimination Act 2004
- Disability Discrimination Act 1992
- Racial Discrimination Act 1975
- Sex Discrimination Act 1984
- New South Wales Anti‑Discrimination Act 1977
- Western Australia’s Equal Opportunity Act 1984
- South Australia’s Equal Opportunity Act 1984
- Victoria’s Equal Opportunity Act 1995
However, there are some exceptions to section 351(1) contained in section 351(2) that allows discrimination based on these grounds in the following circumstances:
- Where taking the action was required by the job’s essential requirements
- Where the action is not illegal in accordance with any other anti‑discrimination legislation that’s in force in the location where the action was taken
According to Australian legislation, interviewers may ask interviewees for information to determine their ability to perform a job if it is reasonably needed for non-discriminatory purposes.
How does discrimination apply to questions regarding Salary History?
To answer this question, the first thing that must be discussed involves what information interviewers receive when they are provided with an interviewee’s salary history.
An interviewee’s salary history can include the following information:
- The names of each company they have worked for
- The job titles they have had
- The salary(pay) they were receiving for each previous position
- The benefits they were receiving with each position
- The entitlements they were receiving with each position
- The locations they were working in
- Whether they had any salary deductions
An interviewee’s salary history doesn’t reflect their value in the new position, as every job assignment is different. Furthermore, it doesn’t show potential employers how good they were at their jobs, their passion, enthusiasm, their ability to work in a team, or the talent the interview has, as there are overpaid and underpaid people across the market.
Therefore, it seems reasonable to conclude that salary history isn’t entirely relevant to an employee’s job performance.
What do I do if I’m asked about my Salary History?
You can choose to answer questions about your salary history, or you can choose to politely decline the interviewer’s question. If you choose to decline the question, the interviewer may be more inclined to explain why they need to know your salary history, making the question more ethical and less discriminatory.
Alternatively, you can also choose to provide a flexible answer by putting forward a salary range. For example, you could state, “I am earning in the mid-fifties,” or perhaps give them a range of two numbers to work with.
As an interviewee, you should be aware that it’s unethical and unwise to lie about your salary history if asked. Doing so could backfire if the interviewee discovers your actual salary history or verifies it. A major disadvantage of providing your salary history to an employee is that it could provide your prospective employee with a leg up in the salary negotiation process.
In particular, this is true since it’s highly unlikely that your prospective employer will provide you with information regarding the business’ recent profits, monetary value, etc. As an interviewee, it’s important for you to be aware of your rights so that you can identify potentially discriminatory or unethical questions during your interview or recruitment process.
What can employees do if they have been discriminated against during a job interview?
As an employee, if you believe you have been discriminated against during a job interview, you can make a claim to the Australian Government’s Fair Work Ombudsman(FWO) online or by calling them. Similarly, you can make a claim with the Fair Work Commission(FWC), or you can seek assistance from the Australian Human Rights Commission (AHRC) or any other relevant anti-discrimination body.
For a claim to be valid, an interviewee would need to either:
- Identify the interviewer’s unlawful question or;
- Find a specific piece of evidence that reasonably infers discrimination on behalf of the interviewer either during the interview or in post-interview discussion/decision-making
If a claim is found to be valid, the FWO will investigate and potentially file a lawsuit for unlawful workplace discrimination against the employer for breaching the Fair Work Act. If the action is found to be discriminatory, the employer will face penalties, and the prospective employee will be awarded a remedy.
Conclusion
Ultimately, as an interviewee, you should be aware that interviewers can legally ask you for your salary history, but you aren’t required to answer the question. As an employer, you should be aware that you can ask interviewees about their salary history. However, you can’t ask this question for discriminatory purposes.
If you’re an interviewee and you believe you have been asked about your salary history for discriminatory purposes, you should hire a lawyer for legal advice to determine whether you can take action against the employer who has potentially discriminated against you.
Alternatively, if you’re an employer and you’re still unsure about whether you should ask your potential employees about their salary history, you should also hire a lawyer for legal advice to avoid potential legal consequences.
Get a fixed-fee quote from Australia's largest lawyer marketplace.
