Dear Matt: Why do employers ask for your current salary or salary history when applying for a job? If they won't tell me what the job pays in the ad, why should I tell them what I make when applying? How do employers know the person applying isn't making up a higher number in hopes of getting more money if hired?
Matt: Employers ask about your salary history to assess the likelihood of them being able to make an offer to you that you might accept, says Tony B. Nelson of TBN Consulting, LLC (tbnconsulting.biz), a Twin Cities-based search firm for direct-hire, contract and freelance professionals within the marketing profession.
If your salary appears too high, they may decide not to interview you as they don't want to waste your time or theirs. Likewise, if your salary appears too low, they may question your ability to do the job at the level they need. They also use this information for determining what salary to offer if they do decide to make you an offer.
There are many ways an employer can get a ballpark figure of your current salary, so stretching the truth about that isn't recommended. It's not only unethical, but keep in mind, employers can use the following methods to learn what your current salary range really is:
They can simply ask you to provide your last pay stub and/or W2 for verification of your stated salary history.
Employers can call your previous employers listed on your résumé to perform a reference check and ask for a salary verification.
Employers can do research to get a general idea of what your salary history has been by looking at average salaries given your education, level of experience and where you've worked.
Employers that interview numerous people for similar positions often have a pretty good idea of what competitors are paying their employees.
HR professionals and employers from different companies often talk to each other to obtain this information.
Some government positions are based on a general federal pay scale and some government position salaries are public record.
If you must disclose your salary history, you should also disclose your salary expectations, says Nelson. This can allow the candidate an opportunity to discuss why their salary expectation may differ from their current salary (higher or lower), Nelson says.
"I want to ensure I'm not wasting anyone's time and to provide the employer accurate information to help them construct a competitive, equitable, reasonable salary offer," he adds. "My intentions are not to lowball a candidate, but to ensure there are no surprises on either side. The last thing I want to do is invest hours with a candidate, extended an offer and then have it turned down because compensation is not aligned."
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