Enter 2018 with a plethora of legislation which is going to make the task of recruitment a lot more difficult, both for employers and recruiters.
No Compensation questions!
In the USA, legislation banning employers from asking for compensation history is being rolled out to assist women reaching pay parity with men and remove an unconscious bias from employers toward women who refuse to answer the question
Laws against asking about a job candidate’s salary history have already gone into effect in the states of Delaware, Oregon, New York and California as well as in New York City, Pittsburgh and New Orleans and later in 2018 in Massachusetts and Puerto Rico and close to 20 states. In some places, such as Illinois and New Jersey, salary history laws have been vetoed. In others, such as Philadelphia, they have faced legal challenge.
What is certain is that employers and their recruiting partners must revamp what has been a key part of the hiring process and for determining market rate of compensation for a position. Historically, client organizations have expected recruiters to collect information such as base salary, target and actual bonus, as well as equity plans from each candidate early in the recruiting process. For years this information has been regularly collected to determine whether a candidate falls within the target compensation for a position. Not anymore!
With no information from candidates until after an offer has been accepted, recruiters can, in theory, focus solely on finding qualified candidates with the right skills, knowledge and experience, and then base salary on the position. Supporters argue this will eliminate a key factor in the cycle of gender discrimination, low pay and low raises, which compound over women’s careers.
The legislation includes the following:
- Employers are barred from asking candidates about compensation history in interviews, applications, as well as from their current or former employer. Screening of applicants based on past salary is also prohibited.
- If an employer inadvertently learns a candidate’s salary history, it may not be used for the basis of an offer.
- If the law is in effect for states or cities where interviews and conversations take place for both candidate and interviewer, as well as where the position is located, the question of past compensation may not be asked.
- Candidates may voluntarily disclose their salary history without being prompted by interviewer.
- Employers may ask a candidate what compensation expectations they have for the position.
After an employment offer has been made and compensation terms have been defined, the law allows for confirmation of past salary. If reported by candidates, sanctions for employers unintentionally or wilfully violating asking job candidates for past compensation, range from fines as high as $250,000, mandated training or possible jail time.
Over in Europe there is “GPDR” – General Data Protection Regulation
From May 2018, the rules and regulations regarding the way in which data is stored, shared and moved will change dramatically, significantly impacting on the working practices of the executive search profession.
The legislation will impact all organisations that are either based in or do business in the EU. It will give individuals greater rights and control over their data by way of consent as well as the power to access, rectify or erase information held and the right to be informed.
Whilst the legal basis for the processing of data has always been present in previous data privacy rules, under the new legislation, the bar has been raised on the requirement for Consent.
This Consent must be freely and clearly given, based on an active opt-in, documented and easily withdrawn. You are required to notify data subjects that they have the right to withdraw their Consent and you cannot demand Consent as a condition of providing a service. The new legislation requires you to record and be able to clearly demonstrate compliance with the principles – for example by documenting the decisions you take about a processing activity.
The changes will have a significant impact on the executive search profession. Any firm that operates in the EU, has clients that operate in the EU, or that processes data on EU citizens are subject to these changes in legislation, regardless of where information is stored, whether it is held in emails, a database or in spreadsheets. The rules will have a similar impact on technology suppliers to the industry, with those who act as a data controller or data processor.
Executive search firms will have to show that their systems and technology are compliant. There are significant financial and reputational implications for failing to comply with the changes. Organizations will be required to notify supervisory authorities and affected individuals of a data breach within 72 hours of discovery. With severe non-compliance penalties of EUR20 million or 4% of worldwide turnover, the GDPR will make organisations more accountable for their approach to data and the changes must be given appropriate consideration.
Whilst the changes do not come into force until May 2018, it is important to invest time to understand and plan for the legalisation to ensure that any required changes can be carefully considered and that the GDPR will cause minimal disruption to your organisation.
Back to the USA – there is “PII” Personally Identifiable information
If you are dealing with the USA, especially California, you need to be fully aware of PII.
Personally Identifiable Information (PII) or Sensitive Personal Information (SPI) as used in information security and privacy laws, is information that can be used on its own or with other information to identify, contact, or locate a single person, or to identify an individual in context. The abbreviation PII is widely accepted in the U.S. context, but the phrase it abbreviates has four common variants based on personal / personally, and identifiable / identifying. Not all are equivalent, and for legal purposes the effective definitions vary depending on the jurisdiction and purposes for which the term is being used.
The following data, often used for the express purpose of distinguishing individual identity, is classified as PII
- Full name (if not common)
- Home address
- Email address (if private from an association/club membership, etc.)
- National identification number
- Passport number
- IP address (when linked, but not PII by itself in US)
- Vehicle registration plate number
- Driver’s license number
- Face, fingerprints, or handwriting
- Credit card numbers
- Digital identity
- Date of birth
- Genetic information
- Telephone number
- Login name, screen name, nickname, or handle
States and cities each have their own jurisdiction, but all require fines as high as $250,000. There typically is a grace period for employers after the law has taken effect before enforcement begins. Civil actions, for example, are not permitted against employers in Oregon until January 2024.
It is recommended that organizations should:
- Remove compensation questions from hiring forms, such as job applications, candidate questionnaires and background check forms.
- Update interview and negotiation policies and procedures.
- Train hiring managers and interviewers on the new provisions.
- Make interviewers aware that this law has an oral component which applies to their conversations with candidates via phone or in-person.
Happy New Year!
(Acknowledgements to Hunt Scanlon, Search-Consult, UK IPD)