Massachusetts Law to Have Major Impact on Law Firm Recruiting

Earlier this year, Massachusetts passed a groundbreaking law prohibiting employers from requesting information about candidates’ salaries during the recruiting process.

That provision was enacted to prevent perpetuation of race and sex discrimination due to historically lower salaries assigned to women and minorities. 

While the Massachusetts law doesn’t go into effect until July 2018, its impact has already reverberated throughout the country, as several other jurisdictions (including the cities of New York and Philadelphia) have separately initiated legislation on the same topic. Many others are sure to follow. The law has also raised eyebrows in human resources departments, which historically have been on the front lines of preventing sex and race discrimination, but which also invariably demand current salary information from job applicants.

Experts are attempting to determine the impact of the law. Here are some initial thoughts, particularly geared to the legal industry.

---The law will most directly impact administrative hiring, since all of those potential candidates will clearly be classified as employees, but there are implications for lateral hiring as well. Firms can continue to ask for historic compensation information for potential equity partners, but a strong argument can be made that contract or nonequity partners (and certainly counsels) might be classified as employees. (While associates are clearly employees, the impact of the law is likely to be more limited for them, since associate compensation decisions are usually based on class year, not on the candidate’s historic compensation.)

---The law will force employers to revamp their application forms, which almost universally request current compensation information. At the same time, it will cause employers to probe more deeply into questions about desired compensation. As it now stands, savvy candidates often attempt to deflect this question because it essentially asks them to bargain against themselves. (One possible outcome will be for certain candidates to decide to voluntarily disclose their current compensation to “set a marker” for the compensation discussion.)

---The law might force employers to lower base salaries and concentrate more on bonus programs. In this way, employers can still hope to attract candidates who are at the top end or outside the salary ranges, while maintaining pay equity among current employees.

---The law is likely to increase the importance of written job descriptions and summary of required qualifications, in that those factors will likely become the primary determinants of how particular candidates are compensated. That could very well restrict the flexibility of employers to consider “alternative” candidates who might not satisfy all of the criteria of the job, but who have impressed employers with their potential. At the very least, employers might be forced to issue a revised job description at a potentially lower salary range.

---Candidates will be harder to close on compensation, and this may lead to more turndowns. When faced with the desired compensation questions, many candidates, particularly for midlevel administrative positions, will inevitably err on the low side, since they want to ensure that they keep their candidacy alive. In the end, however, those candidates may hold out for a significantly higher number.

---Outside recruiters will become more valuable as a necessary intermediary. Good recruiters will gain the trust of candidates, who on their own might disclose their current compensation with the understanding that the number not be disclosed to the employer. Even if the candidate doesn’t disclose his or her current compensation, good recruiters often can determine the real “bottom line” better than a direct representative of the employer.