Bank of America will impose new restrictions on inquiring about a job candidate's salary history, aiming to help close a gap between how much women and minorities are paid compared with other employees.
The policy, which takes effect in March, "restricts how we solicit compensation information from candidates during the hiring process," Sheri Bronstein, the bank's global head of human resources, said in a memo to employees this week. "We will implement it across the company to help ensure we consider new hires for individual qualifications, roles and performance, rather than how they may have been compensated in the past."
Bank of America was already required to meet similar rules in states including Massachusetts and California. The bank's most recent review found that female employees in the U.S. and U.K. are paid on average 99 percent of what male employees earn, after adjusting for factors including role in the organization, experience, work location and performance, according to the memo. Minority employees are also paid on average 99 percent what their nonminority colleagues make, the review found.
Bank of America's figures exactly match results released last week by Citigroup, which said it also pays women and minorities 99 percent of the rate for men and nonminorities, taking into account job level, function and geography. The New York-based bank said it's taking steps to close the gaps.
In the U.S. overall, women earned 83 percent of what men made in 2015, according to a Pew Research Center analysis of median hourly earnings of both full- and part-time U.S. workers. For the same year, black Americans' compensation was about 75 percent of the rate for whites, according to Pew.
In the U.K., companies with at least 250 employees are for the first time required to report the difference between how much men and women earn on average. The new rule says banks can't take into account job titles, experience or other factors when making the calculation, so those figures will differ from the 99 percent estimate Bank of America found in its review.
Bank of America's decision follows a shareholder proposal by Arjuna Capital that sought to force the company to improve disclosures about its pay practices. Arjuna withdrew the proposal after the company released information about the wage gap.
Bank of America's disclosure is just one step in improving mobility for women and people of color on Wall Street, Natasha Lamb, managing partner at Arjuna Capital, said in an interview.
"The median gap would help to tell the full story and it's another thing that as investors we'd like them to track and close over time," Lamb said. "The endgame is moving more women and minorities into leadership and then reaping the benefits that diversity affords."
