It’s a basic law of the workplace. Your co-workers will rattle off their darkest secrets, freely share their innermost feelings and even brag about their sex lives, but when it comes to revealing salaries, mum’s the word.
It’s easy to see why salaries are not part of the discussion. If another person is paid more than you, he or she will have to live with your jealousy and envy. If another person is paid less than you, you will have to live with their jealousy and envy, not to mention the fear that the boss has been grooming a lower-cost, harder-working person to replace you.
In fact, the only time when people are anxious to divulge what they get paid at their job is when they are applying for a new job. That’s when salary figures tend to appreciate sharply. This brings us to a second basic law of the workplace — you always tell a potential new employer that you make more money, so that they will have to pay you even more, more money.
It’s dishonest, I know, but everyone does it. How else do you think I could have negotiated the $4.37 and cents I get every week for writing this column?
As clueless as they are, employers have finally caught on to this salary scam. Or if they always knew that our resumes inflated our salary, as well as our capabilities, they never bothered to do anything about it until recently. Now, with the job market cratering and the applicant pool growing ever more desperate, employers who are feeling frisky can ask for your social media passwords, the number of your Cayman Island bank account, and most devilish and devious of all, a copy of your most recent W-2.
You know what a W2 is, of course. It’s the tax document you receive before tax time, detailing what your employer paid you. You might want to dig out your last W-2; it’s that crumpled-up slip at the bottom of your wastepaper basket. Yes, the paper is soggy. Remember how you cried and cried when it showed up in the mail?
If you haven’t studied a W2 recently — or if you haven’t seen a W2 recently — it’s easy to find the relevant data. That itsy-bitsy, teeny-tiny number at the top — that’s your salary. The big number next to it — that’s your taxes. All those empty boxes — that’s where your company lists the value of the benefits you receive. That’s why those boxes are empty.
According to a recent “Net Worth” column by Kathleen Pender in “The San Francisco Chronicle,” today’s job seekers should be ready to prove their last year’s salary. This may require submitting a W-2 or tax return, or the balance of your bar bill at The Kit Kat Klub. If it strikes you that these demands cannot possibly be legal, guess again. As Pender writes, “I checked with recruiters, lawyers, regulators and privacy experts. The consensus: Asking applicants for a W-2 is not illegal.”
Pender goes on to state that the practice is not yet widespread, but it is spreading fast in an economic environment where “employers have the upper hand.” Moreover, the practice is “more common in certain industries, such as financial services.” This makes perfect sense. Unless you can prove by your W-2 that you are capable of gouging clients to make yourself a fat salary, no major bank or investment firm will want to have anything to do with you.
While the demand of a W-2 dilemma is a nationwide phenomenon, it is interesting to note that in certain parts of the country, requesting tax data as part of the hiring process is illegal. One of the enlightened areas, you’ll be interested to learn, is the District of Columbia. So if you’re wondering how certain political figures in Washington manage to get paid so much, now you know.
Of course, the biggest fear in revealing your old salary is that your potential employer will be able to calibrate your new salary well below your current poverty level. Even if salary is not an issue, W-2s can contain other information you’d like to keep confidential. Like the amounts you receive in dependent care and adoption benefits. This is critical since anyone who is loving enough to care for a dependent or adopt a child is obviously not the heartless, work-obsessed individual employers want to hire.
Bob Goldman was an advertising executive at a Fortune 500 company, but he finally wised up and opened Bob Goldman Financial Planning in Sausalito, California. He offers a virtual shoulder to cry on at email@example.com.