The new rule is intended to create a level playing for “bad negotiators” who’ve been paid less (women in particular) and who will in future be liberated from the shackles of their historic low pay. However, by encouraging banks to come in with incredibly low offers in an attempt to flush out pay levels, Johnson says legislators will simply make existing discrepancies worse.

For their part, banks will need to carefully document the process leading to candidates disclosing their pay levels voluntarily. – There are fines of $250k for organizations which actively ask candidates to provide the information. “Banks are going to need a paper trail,” says Johnson. “- You’ll have lawsuits over this. Three years later, banks will need to be able to point to a signed declaration saying the employee gave his or her information willingly.”

eFinancialCareers / June 20, 2017