Massachusetts Bans Employers from Asking Applicants About Previous Pay • Hacker News Board

Re: Massachusetts Bans Employers from Asking Applicants About Previous Pay

#411

Post by st3v3r » Tue, Aug 02, 2016, 10:43 PM UTC

cheald wrote: post #172

jazzyk wrote: post #156

Earlier quoted context omitted.

But they are exposed! In case of financial trouble (very common at startups), who gets to be laid off first, the CEO or the developer? Also, rank-and-file employees are typically scape-goated in legal proceedings, example: finance people going to jail for rogue/insider trading, even though upper management at least encouraged such behavior.

Every employment position comes with some degree of risk exposure. But, the risk of "I might lose my job" is quite a lot less scary than "I might lose all my invested capital and/or be stuck with crippling debts after the company crumbles". Early-stage startup employees are given greater compensation packages than later-stage employees specifically because of the greater risk of going to work for an early-stage start…

"Every employment position comes with some degree of risk exposure. But, the risk of "I might lose my job" is quite a lot less scary than "I might lose all my invested capital and/or be stuck with crippling debts after the company crumbles". "

That doesn't happen. The company has those debts. Not the individual.

"Early-stage startup employees are given greater compensation packages than later-stage employees specifically because of the greater risk of going to work for an early-stage startup."

Usually not, actually. We've seen plenty of stories about early stage employees being underpaid compared to what the new guys get, and their stock compensation gets dilluted to all hell.

"This isn't a very difficult thought exercise - if you believe the risk profile is greater for employees than CEOs, then why not quit your job and become a CEO of your own company?"

Because I like engineering, and becoming CEO is the fastest way I know of to stop doing engineering.

Re: Massachusetts Bans Employers from Asking Applicants About Previous Pay

#412

Post by hinkley » Tue, Aug 02, 2016, 10:44 PM UTC

matthewowen wrote: post #301

gozur88 wrote: post #277

Earlier quoted context omitted.

>If there exist jobs that produce $1MM in value but that have a going rate of 200k, then there should be more of those jobs: either the company doing the work should expand, or it should have competitors. How could you possibly determine how much value your efforts are producing? How much value are you assigning to the risk the founder and investors are taking? Maybe your $200k job is producing $200k in value. Or eve…

> How could you possibly determine how much value your efforts are producing? How much value are you assigning to the risk the founder and investors are taking? Maybe your $200k job is producing $200k in value. Or even less. I'm not disputing that there's difficulty, and that it might not always be possible (although we can often estimate and assign a confidence level). But the parent comment claimed that even if we…

In college I spent a couple summers doing repair work in the shop of a family friend. I got stuck with a boondoggle repair and when it got into day 2 that I was still working on it, and the manager got pissed off and tried to take over for half an hour before he figured out why it was taking me so long. Then we had a shocking conversation about the fact that while he was paying me $x/hr, I needed to be booking at least $10x/hr in repairs, so I needed to work faster. It seemed so unfair to me until I spent a lot more time working in small companies.

The repairs were a profit center, and the labor I was billing was keeping the utilities turned on, buying replacement tools, consumables, paying for my lunch break, covering rework, a hedge against me injuring myself, paying for the shop van I used to run inventory between stores, paying taxes, business licenses, my manager's salary, the owner's salary, paying for Bob to wander over and consult on a repair I wasn't sure about, paying the interest payments on the loans, and covering the loss leaders that got us repeat customers who needed repairs in the first place. Things like trade-ins and entry level equipment.

At your programming job, every manager above you in the chain, every support team that you use to get your work done are all being paid out of the money billed for you. Yes you may be writing $1M in software a year, but the company wouldn't exist and you wouldn't have any sales without those other people, so all of that overhead gets subtracted from your value. Ironically and possibly painfully, a company can exist for months without a single programmer, but it can't exist long without a management chain.

Re: Massachusetts Bans Employers from Asking Applicants About Previous Pay

#413

Post by Tsagadai » Tue, Aug 02, 2016, 10:44 PM UTC

cheald wrote: post #74

slg wrote: post #58

Earlier quoted context omitted.

I am a developer, so I am all for higher developer salaries, but your posts shows a common misunderstanding about economics. The value someone creates has nothing to do with their salary. Their salary is dictated by how many people need to hire developers and how many developers exist to fill those jobs or in simple terms, supply and demand. I might create millions of dollars in value with my code, but there might be…

Nail on the head right here. The price of an employee isn't their MPL, it's no greater than their MPL and is set by how little the next guy is willing to take to do the job. Competitive pressures work to drive down labor prices, too! Nobody is stopping engineers from saying "I'm going to contribute $1.5m to your bottom line this next year, I want you to pay me $1.4m", but they'll be shown the door because there's a g…

You seem to assume that no one is being paid to do nothing. Sometimes an employee, for a multitude of reasons, may be paid top dollar and merely benched. Whether to keep the employee out of competitors hands or because their deployment is done and as a reward for prior service does not matter. There are no upper or lower bounds* in what employers will pay.

* I say there is no lower bound because slavery still exists. There are employers who do not pay people at all.

Re: Massachusetts Bans Employers from Asking Applicants About Previous Pay

#414

Post by st3v3r » Tue, Aug 02, 2016, 10:50 PM UTC

jdhawk wrote: post #374

cheald wrote: post #104

Earlier quoted context omitted.

Assuming that you can tolerate the commensurate risk, absolutely. Many people forget that the rank-and-file employee isn't exposed to the financial and legal risk that their employers were/are.

This is what they're trading, decreased risk for decreased reward.

But in reality, it's not really a decreased risk.

Re: Massachusetts Bans Employers from Asking Applicants About Previous Pay

#415

Post by st3v3r » Tue, Aug 02, 2016, 10:51 PM UTC

eropple wrote: post #367

Twirrim wrote: post #218

Earlier quoted context omitted.

Argh. Oh well. Massachusetts continues to be a state I have on my blacklist.

Or you can just get your non-competes redlined. I did it at literally every job I worked at after my first out of college (and that non-compete was "travel companies", BFD).

I could, but why bother having to do that when I could just live in a place that doesn't recognize them to start with?

Re: Massachusetts Bans Employers from Asking Applicants About Previous Pay

#416

Post by r0m4n0 » Tue, Aug 02, 2016, 10:52 PM UTC

I applied and soon after worked as an engineer for a large company that not only asked for my previous compensation but part of the application process involved my employer validating that I actually made what I told them. They worked with a third party to match my figures with W2 statements and/or pay stubs.

It was really intrusive. Pay should equate to value, not some silly ladder climb

Re: Massachusetts Bans Employers from Asking Applicants About Previous Pay

#417

Post by JamesBarney » Tue, Aug 02, 2016, 10:55 PM UTC

rogerdpack wrote: post #324

JamesBarney wrote: post #272

Earlier quoted context omitted.

Most negotiation experts disagree with this advice. The first person who gives a number anchors the conversation to that number. When you name a number you certainly do set a max on negotiation, but you also get to set the starting number. And many negotiation experts think the latter is more valuable than the former. So they can start off trying to negotiate you down from your max, or up you can spend your time tryi…

I guess the fear is that you'll anchor it "lower" than they would have. Example if they are intending to pay 120, and you say "I'm hoping to make 110" they might just come down to 110. But I suppose if you start at your high range that might be in your favor. Some of us (myself included) just don't know what we're worth so it's hard to know how to start the deal...

Also if your problem is every time you look for a job people keep on wanting to throw more money at you than you could ask for with a straight face. Well then dang I wish I had that problem :)

This problem is usually because people just set their starting price too low, or aren't firm enough on it. One tactic(I haven't used yet, but I'll try the next time I apply to a job) is ask the hiring manager how selective they are. Many time they'll brag about how hard it is to join their company. They'll say things like "We only accept 1 in 10 developers". Boom now they just admitted that if they were paying fair market value their offer should be about $153k :). [0] This is a great place to start a salary negotiation. Also glassdoor is a good place to find information for where to start a salary negotiation as well.

[0] 80% of devs get paid between $57k(10th %) and $153k(90th %).

Re: Massachusetts Bans Employers from Asking Applicants About Previous Pay

#418

Post by bjornsing » Tue, Aug 02, 2016, 10:58 PM UTC

bjornsing wrote: post #382

jazzyk wrote: post #239

Earlier quoted context omitted.

Most founders (at least in the software area) provide a lot of sweat equity, but almost never any cash. Also, early startup employees are persuaded to accept below-market salaries and work a lot of overtime, exactly like the founders, without the upside ( rarely more than 1% of the company).

I know a lot of founders who've put in significant cash in their businesses. And besides, sweat equity is also, well, equity. I'm not saying there aren't early employees that deserve better deals, I'm quite sure there are. But a lot of the perception of unfairness I think stems from a lack of understanding of the differences between being a founder and being an early employee. They are just very different bargains, e…

Come to think of it, I've been playing a bit with Bayesian probabilistic programming with PyMC lately, and it might be pretty interesting to put together a model for this. I think it could give a pretty interesting picture of how expected future outcomes vary for the different people, depending on the different parameters. Anybody want to join in the fun? :)

Re: Massachusetts Bans Employers from Asking Applicants About Previous Pay

#419

Post by thomasahle » Tue, Aug 02, 2016, 10:58 PM UTC

throwaway201607 wrote: post #378

nsedlet wrote: post #289

Earlier quoted context omitted.

I agree with this: employees are at a huge information disadvantage. However, I think a better (& admittedly more radical) solution to this problem would be to force employers to publicly post anonymized salaries by job title. That way prospective and current employees know exactly how much they ought to be paid. It makes salary negotiation almost trivial. Preventing employers from asking about previous salary does n…

Except that its not unfairly pegged to gender: http://www.forbes.com/sites/karinagness/2016/04/12/dont-buy-...

Maybe around 5% is https://en.m.wikipedia.org/wiki/Gender_pay_gap

Re: Massachusetts Bans Employers from Asking Applicants About Previous Pay

#420

Post by tn13 » Tue, Aug 02, 2016, 11:04 PM UTC

I don't like bans but whenever people asked me about my current pay I told them it is confidential and I should be judged based on what you are willing to pay rather than what I am making.

My first job change gave me 2X the salary.