Jake is interviewing for a marketing coordinator position at TechCorp, a growing software company. He is currently earning $38,000 at his small nonprofit job but knows that similar positions at tech companies typically pay between $55,000 and $65,000. During the interview, everything is going well until the hiring manager, Ms. Chen, asks:
"So, Jake, what's your current salary?"
Jake hesitates, realizing he's in a tough spot. He knows that if he tells the truth about his current $38,000 salary, TechCorp might offer him something like $42,000-$45,000, thinking that he will be happy with an offer of a higher wage than he currently makes. The position should pay closer to $60,000, based on market rates and the actual earnings of other marketing coordinators at TechCorp. However, he does not want to lie during the interview process.
Jake knows that his nonprofit salary does not match his skills or market value, and he is concerned that revealing it could lead to a lowball offer and hurt his long-term earning potential.
Two bills were submitted to Congress in March 2025 that would amend the Fair Labor Standards Act (FLSA) of 1938. H.R. 2007 would require employers to disclose the pay range of a position to applicants. H.R. 2219 would prohibit hiring companies to ask an applicant what their current salary and benefits are.
Please discuss the following with your peers:
In your opinion, what should Jake do in this situation?
Is it fair and ethical for employers to base new salary offers on previous wages? Why or why not?
How might this practice perpetuate pay inequalities across different industries or demographics?
Stand Firm (If Pressed): If Ms. Chen insists on a number, Jake can politely reiterate the focus on the role's value and the market, saying, "I'd prefer to evaluate the offer based on the responsibilities of this role and TechCorp's standard compensation bands for this position, rather than my salary history."
Fairness and Ethics of Basing Offers on Previous Wages
The practice of employers basing new salary offers on a candidate's previous wages is widely debated and increasingly viewed as unfair and unethical.
Why it is Unfair and Unethical:
Ignores Market Value: An employee's past salary often reflects the budget limitations of a previous employer (like Jake's nonprofit) or poor past negotiation, not their actual skill set or market worth. Basing a new offer on this irrelevant data allows the employer to pay less than the job is worth.
Perpetuates Past Inequities: The practice carries forward unfair or discriminatory pay gaps. If a woman or minority was underpaid in a previous role due to systemic bias, using that low salary as a benchmark guarantees they will continue to be underpaid in the new, often higher-value, role.
Creates a Conflict of Interest: The employer's interest in maximizing profit conflicts directly with the ethical responsibility to offer fair compensation for a role. Asking for salary history is a tactic designed to ex
Sample Answer
This is a common, challenging negotiation scenario. Here's a discussion of Jake's situation, the fairness of salary history inquiries, and their impact on pay equity.
What Should Jake Do in This Situation?
In this situation, Jake should avoid disclosing his current salary while still being honest and redirecting the conversation toward his market value.
Recommended Strategy: Bridge and Deflect
Jake should not lie (which damages credibility and is unethical) nor should he volunteer the $38,000 figure. He should use a technique that bridges the current question to his future value.
Acknowledge and Deflect: Jake should acknowledge the question but immediately pivot to the relevant salary range for the new position.
Jake's Response: "Ms. Chen, I'm excited about this opportunity and believe my skills are perfectly aligned with TechCorp’s needs. While my current compensation is reflective of the nonprofit sector, I'm focused on moving forward. Based on my research into the market rate for a Marketing Coordinator with my experience, I'm looking for compensation in the $60,000 to $65,000 range."
Focus on the Job's Value: By stating his expected range first, Jake anchors the negotiation near the high end of the market rate ($60,000–$65,000) rather than allowing his low previous salary to be the anchor. This prevents TechCorp from lowballing him based on his past earnings.