Can a new employer find out about previous salary?

SoapBox Forums Forum for Indian people living in the uk Can a new employer find out about previous salary?

This topic contains 27 replies, has 19 voices, and was last updated by  sammy 8 months, 3 weeks ago.

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  • #821

    bill
    Participant

    I’m considering my options workwise and one options is to move companies. However, as I am on £x at the company I currently work. I told the new company a different figure in regards to my current salary. Actually, I told them I was earning 14k more than what my real salary really is (this additional 14k is the market rate for my position).

    I am now worried. As part of the references can the new company ask my current HR department or perhaps calculate it on my P45. I am worried now, because I want the new position and was after a big boost in salary, which reflects my position. And I did not want them to just lower the offer based on my current salary.

    Are salaries disclosed as part of the standard references?

  • #822

    mo
    Participant

    Yes it is one of the bits of info in a standard reference but if you got overtime, bonus, car etc you could say you were adding those in if questioned.

  • #823

    nomad
    Participant

    It will be blindingly obvious on your P45. They will see it, for sure, but it shouldn’t matter, most employers will just ignore it and they are used to it because everybody lies. As long as you do your job well and you are worth the money then shouldn’t be a problem.

  • #824

    adam
    Participant

    I’d have thought it was confidential, though I know nothing of these things. I’d be pissed if someone gave away my salary to anyone, its my business and no one elses. The new position should not be based on previous salary (unless following a rigid pay scale eg public sector teachers etc but band then also denotes experience) but on the skills etc you bring. Salary is a negotiation point, them knowing your salary then makes the negotiation biased.

  • #825

    cornershop
    Participant

    The P45 will be a clue. But I was an HR/Employment law advisor. I certainly never ever looked at someone’s P45 it always ended up with payroll. So I’d breath a little bit easy on that. It would need to be a chance encounter between someone from the management team, discussing the vastly inflated salary they had to offer you, with someone from the payroll team, who just happens to remember that the figures from your P45 don’t quite reflect the amount on the reference they’ve not seen as these are normally kept by HR.

    Will the reference reflect your salary? Tombstone references are almost the norm these days. Name, Employer, position start date & end date. An employer is free to disclose salary if asked – they normally wouldn’t bother if they were’nt asked, but there’s new & stricter Data Protection legislation coming out in May which many organisations are preparing for and I’d guess many employers have already got cautious about disclosing information like that now without the permission of the data subject (you!).

    Just Relax and keep your fingers crossed – good luck.

  • #826

    jo
    Participant

    This bears an uncanny relation to a Q asked on moneysaving expert 7 years ago:

    “However, as I am on low paid salary at the company I currently work, I told them a different figure in regards to my current salary. Actually, I told them I was earning 14k more than what my real salary really is (this additional 14k is the market rate for my position).

    I am now worried and realise I was stupid. I reckon they can ask my HR department or perhaps calculate it on my P45. I am so worried now, because I really wanted that position and was after a big boost in salary, which reflects my position. And I did not want them to just lower the offer based on my current salary.”

    http://forums.moneysavingexpert.com/showthread.php?t=2735585

  • #827

    holycow
    Participant

    As part of the references can the new company ask my current HR department

    Without your explicit permission, your current HR department would be breaking the Data Protection Act 1998 if they told the new company your salary present salary – or indeed anything about you. If you put your current employer down as a reference then you may have given them such permission?

    or perhaps calculate it on my P45.

    Whoopsie. Let’s hope that submitting false information in your application isn’t grounds for instant dismissal. It is where I work. Wouldn’t want that hanging over me. Between that and plagiarising someone else’s question without reference (that’s a new one on me) some people might start to form a view.

  • #828

    Aarav
    Participant

    The P45 will be a clue. But I was an HR/Employment law advisor. I certainly never ever looked at someone’s P45 it always ended up with payroll.

    That assumes he is joining a large company so it might not be so cut and dried.

    If you end up being challenged about it just say that regardless of previous salary this is what you are worth and one of your reasons for leaving is being undervalued by your current employer.

  • #829

    paki
    Participant

    They won’t do anything. If they want you on the rate they offered then that’s that.

    I’ve decided ithat asking people’s salary is a pointless interview question. Anyone currently employed would want an incentive to move. I now tell them what I’ve budgeted for the role and ask if that suits them. This is because when the tables are turned I prefer to be employed at a rate offered that meets or exceeds my expectation without first disclosing the expectation.

  • #830

    eee
    Participant

    Well done for being bold enough to get the salary you deserve if that is the market rate.

    do not be concerned about it. Clearly your new employers consider you are worth it.

  • #831

    abdul
    Participant

    Without your explicit permission, your current HR department would be breaking the Data Protection Act 1998 if they told the new company your salary present salary – or indeed anything about you. If you put your current employer down as a reference then you may have given them such permission?

    @hoylcow I don’t think that’s the case. Employers have to give fair and accurate references. I see no way in which giving a person’s leaving salary could be described as unfair or inaccurate.

    http://m.acas.org.uk/index.aspx?articleid=5072

  • #832

    abdul
    Participant

    People are perfectly entitled to ask for a higher salary from a new employer and the new employer will pay you what they think you are worth. No need to lie about previous salary just be honest (ish) about what you think you are worth.

  • #833

    holycow
    Participant

    I don’t think that’s the case. Employers have to give fair and accurate references. I see no way in which giving a person’s leaving salary could be described as unfair or inaccurate.

    @abdul As I said before, there needs to be permission from the employee otherwise it’s a potential violation of the data protection act.

    My understanding is that if I receive a reference request for person A from company B, that I should only answer it with permission from person A. As I said in my previous post, this person may have given permission to their current employer. Just imagine; I write to your employer asking for a reference for you – but I’m doing this to find out information about you for my own interest not as part of a job offer. Congratulations, your employer just released data about you to a malicious third party and without your permission.

    Any business disclosing an employee’s salary and other information without directly seeking their permission needs to check their procedures before May 26 when we switch from the DPA to the GDPR… My understanding is that the person’s status as an employee may even qualify as protected data under GDPR.

    Employers have to give fair and accurate references.

    The first sentence of your link says they *do not have to give a reference*. There is nothing in there with regards the data protection aspect. Your reference is regarding the seperate fact that any reference if made must be factually correct. More I suspect to do with libel etc. There is also nothing about an employer being *compelled* to put any particular thing in there, only that what is their must be accurate.

  • #834

    abdul
    Participant

    My understanding is that the person’s status as an employee may even qualify as protected data under GDPR.

    @abdul The term “protected data” has no meaning in the context of GDPR*. The term used is “personal data,” which is: “any information relating to an identified or identifiable natural person”. So yes, your salary is personal data and your employer is legally obliged to protect it appropriately in order to avoid infringing any of your rights or freedoms (which would include the right to privacy under the ECHR). Anything the employer does with your personal data has to be covered by a “lawful basis of processing” – which in most cases will be one of: consent from the data subject; in order to fulfil a contract with the data subject; or because the data controller is legally obliged to process it (eg your employer has to know your NI number in order to fulfil their legal obligation to process your PAYE).

    As you say, there is no legal obligation to provide salary information in a reference. The lawful basis for processing in the case of a reference is almost certain to be consent (which must be freely and explicitly given, and recorded) and it should be clear when such consent is sought or given what categories of personal data the consent covers, and what use it will be put to. If the employee says: “don’t tell prospective new employers my salary” then the employer would almost certainly be breaking the law if they proceeded to do so.

    A diligent employer would state up front eg in their employee handbook what information they would provide in a reference, would collect and record the employee’s consent, and inform the employee that they have the legal right to challenge any part (or all) of it if they objected.

    * You might have been thinking of the term “sensitive personal data” which does exist in the DPA. That is replaced in GDPR by the term “special category data”. They are effectively the same in that the list basically consists of information about the data subject which could result in them being discriminated against illegally, per the Equality Act 2000. The word “sensitive” frequently caused confusion: many people would be extremely surprised to be told that their salary, bank account details and so forth are not regarded as “sensitive” information under the law. GDPR makes the situation clearer: all personal data is ‘sensitive’, but in differing degrees according to the impact that misuse/misappropriation of it might have on the rights and freedoms of the data subject. That’s what data controllers have to keep firmly in mind when processing personal data – and if they get it wrong then any regulatory penalties will take in to account the risk to the data subject’s rights and freedoms that the personal data represented.

    • This reply was modified 8 months, 3 weeks ago by  abdul.
  • #837

    andypandy
    Participant

    It is generally accepted in the world of HR & employment legislation that when an employee gives his/her employer’s address to another business as a reference, he/she has in effect given their employer permission to disclose personal data and so far as I’m aware there is no current case law to require further explicit information. This may change under the new GDPR legislation.

    As a couple of other posters have stated, there’s no legal requirement to give a reference. In general though it is accepted that they must be honest and factually correct, although this is, as one person said because failure to do so may result in libel action against the reference giver. That however, has only ever happened once to my knowledge and that was limited to a case involving two businesses were both in the financial services industry and both legally obliged to give references under FSA legislation.

    In practice you’d never manage to sue either parties, because of several difficulties you’d find it almost impossible to overcome and any compo would be outweighed by the cost of recovery.

  • #838

    troll
    Participant

    I told the new company a different figure in regards to my current salary. Actually, I told them I was earning 14k more than what my real salary really is (this additional 14k is the market rate for my position).

    I am now worried …

    You should be worried. You lied. What a great start to a working relationship.

  • #839

    doormat
    Participant

    Are salaries disclosed as part of the standard references?

    No. And in fact it’s illegal (AFAIK) to give a bad reference these days, so most companies just confirm that the ex-employee worked for them from such and such a date to such and such a date.

  • #840

    DonaldTrump
    Participant

    I used to work for a tiny and overstretched company. I applied for a new job and got a first interview (via recruitment agency). When the time came for the recruitment agency to check out my credentials with my then-current employer, they rang up in office hours looking for the HR department (which we didn’t have – HR would have been the MD’s remit). But as the company was small and overstretched, and in an open plan office, if a phone went unanswered for a while it would get redirected to other phones. I heard a phone ringing and it ended up getting redirected to me, and it was the agency checkers saying “we are calling regarding a current employee of yours!”

    So I said “ah yes, he’s currently in a meeting with the HR bods you need to speak to, negotiating the terms of a salary raise to retain him”

    Except I didn’t, because I was in an open plan office and would not have got away with it.

    Seriously with that job application, I said that the new employer can’t just base an offer on my current P45 because of the amount of overtime I was working, which didn’t appear on P45 but which was pretty much relied upon for financial survival. THAT is when you can make up a number, as it is variable and hard to trace.

  • #841

    raggy
    Participant

    It wouldn’t bother me, especially if you were involved in a sales role or any role where you would be negotiating on behalf of your employer. Pay is a negotiation: you told them how much you were willing to do the job for and they decided that your services were worth that rate because they couldn’t find anyone else capable of doing the job who would do it for less. End of story.

    Your previous salary is irrelevant, they’ve got no right to base their offer on it, that is tantamount to an anti-competitive practice because it reduces competition between employers on pay and incentives for employees to change employers.

  • #842

    troll
    Participant

    Seriously with that job application, I said that the new employer can’t just base an offer on my current P45 because of the amount of overtime I was working, which didn’t appear on P45 but which was pretty much relied upon for financial survival. THAT is when you can make up a number, as it is variable and hard to trace.

    There isn’t a separate tax record for overtime. All your pay, overtime included, either ends up on your P60 while still an employee or your P45 at termination. Either that or you would have been party to illegal tax evasion. If someone said this to me at interview I’d know for certain they were either a dishonest job-seeker or an indiscreet tax cheat.

    There are better ways to negotiate a good deal.

  • #843

    troll
    Participant

    It wouldn’t bother me, especially if you were involved in a sales role or any role where you would be negotiating on behalf of your employer. Pay is a negotiation: you told them how much you were willing to do the job for and they decided that your services were worth that rate because they couldn’t find anyone else capable of doing the job who would do it for less. End of story.

    All true

    Your previous salary is irrelevant, they’ve got no right to base their offer on it, that is tantamount to an anti-competitive practice because it reduces competition between employers on pay and incentives for employees to change employers.

    When you attend an interview, the employer has very little time or information on which to base their assessment of your skills. Previous earnings is one of the only pieces of hard data that expresses the informed view often of one’s direct competitor. Why would you not insist on knowing that information? Recruitment errors are extremely costly. Frankly I wouldn’t even dream of offering a job to anyone without an appreciation of their current earnings. One does expect and allow for a bit of exaggeration, however. We know what our competitors pay and can usually adjust for the fibs when composing our offer.

    And I always check the P45 for lies. If someone has snuck a fib past one of our hiring managers, we don’t raise it with them. After all they might be worth the big hike. But the expectations of the employee’s probation become more onerous. It’s a risky business to promise too much with exaggerated claims.

    All that said, it’s a negotiation so good luck to the OP.

  • #844

    carlson
    Participant

    @troll I’ve never been asked by an employer for previous salary, only salary expectations, didn’t realise it was so common.

    A recruitment company once asked, but I told them all that was relevant was my salary expectations.

  • #845

    troll
    Participant

    @carlson I’m sure it varies from company to company, individual to individual, but it’s surely very poor negotiation by the hirer not to use current earnings as a means of reining in excessive demands. In my experience many potential recruits have unrealistic financial expectations which prevent them from accessing jobs that could catapult their careers. It’s often fatal to their progression.

    The guiding principle in building your career is to find the most challenging and most promising job with a reasonable salary attached. And certainly not the best salary with a job attached. This is particularly true over the first 10 years of a career. Focusing on money above all often leaves you looking up at the heels of those who understood that mantra first.

    Know your value and negotiate hard. But put development before earnings. The person above you earns more. So become him or her.

  • #846

    DonaldTrump
    Participant

    @troll I am sure you are right. Despite my “Seriously…” opening to that paragraph, I was still being a bit playful in that response. To be honest I’ve forgotten all the details but there is no way that anyone would have thought that I was doing anything dodgy…because I wasn’t. It was blatantly obvious that I was underpaid and was seeking a new job mainly due to this.
    Their opening offer to me, despite my inexperience in negotiating initial starting points, represented a 55% salary hike from my previous, which says it all.

    Naive mug that I am (at the age of 39 this was actually the first job I was going into “cold”, everything else having been via networking, hence a different approach and zero experience of real interviews etc) I just took it. No salary had been mentioned in the ad and what they offered me was significantly higher than what I was going to use as my STARTING point. So I got lucky maybe (although as more worldly-wise friends predicted at the time, I have not seen a raise after 3 years! But honestly I am still on more than I thought I would be on after 3 years, when I applied in the first place. So hey ho).

    But the expectations of the employee’s probation become more onerous. It’s a risky business to promise too much with exaggerated claims.

    This is exactly why I accepted my first offer. I did think about demanding more but I decided that the extra scrutiny that I might be under, would not be worth it (and when I worked out the per-day extra take home from what I could reasonably have tried to hike the offer to, it was basically a Pret sandwich per day, hence my view that the extra stress I might put on myself, going into a big shiny corporate in a job with a lot of responsibility already, just wasn’t worth that daily sandwich )

    I am comfortable with that decision even if might have hampered future salary raises.

  • #847

    tommy
    Participant

    When you attend an interview, the employer has very little time or information on which to base their assessment of your skills. Previous earnings is one of the only pieces of hard data that expresses the informed view often of one’s direct competitor. Why would you not insist on knowing that information? Recruitment errors are extremely costly.

    @troll As the employer you are basically trying to set up an unfair information imbalance in the negotiation. You want to know the potential employees salary to determine their bottom line. You aren’t about to let them see detailed budget numbers for your company so they can see your bottom line i.e. how much their labour is actually worth. In a fair negotiation either both sides show their hand or neither does.

    Using the P45 to circumvent this is unethical if not illegal. That is confidential personal data and it’s being supplied for the purpose of complying with tax law but you are using it for a completely different purpose and one that disadvantages the employee. Only the people that need that data to process taxes should see it and they should only use it to do the payroll calculations.

    There was a series of lawsuits in silicon valley about anti-competitive HR practice where employees found their salaries were being artificially pushed down by an agreement between companies to enforce ‘norms’ and avoid bidding against each other. Referencing against pay from previous employment to make sure nobody can get a big raise by switching jobs is fundamentally anti-competitive: it’s employers colluding to prevent employees getting what a free market would give them.

  • #848

    troll
    Participant

    @tommy I really don’t think you know enough about my business to second guess the rationale. You also appear to be making the erroneous assumption that the P45 data is available at interview stage. It isn’t. At least not usually as a P45 is issued post-current employment. It’s only useful later as a means of veracity-checking. You claim there’s an information imbalance. There isn’t. Every company’s accounts are freely available online for candidates to study. And, in the case of a plc, detailed analysis of productivity numbers, ie profit per hire. You also have the right at interview to request a detailed copy of the company’s latest accounts Far from being outraged, I’d be rather impressed at a candidate who took his or her job hunt that seriously.

    The biggest issue for businesses in my sector (IT) isn’t driving down wages for profit. It’s hiring highly paid specialists to deliver corporate objectives. But maintaining a level playing field between employees of a given skill level is vital. If you breach your pay bands for one developer, you run the risk that the other ninety nine of them get wind and become demotivated, leading to mass resignations. I can’t remember the last time I tried to depress a potential recruit’s salary aspirations for my own gain. But I have to think of all the other staff every single time.

    Owing to experience, I have a good feel for every candidate’s “correct” salary in the above context. Now, if they are honest with me about their current earnings, we can have a constructive discussion about the value of the role, taking in the wider issues of training, development and job satisfaction. If all they want to do is drive up the offer without reference to a verifiable reality, that doesn’t just make the conversation difficult, it tells me their priorities are skewed (see my earlier post) which probably costs them the job.

    As ever, it’s a balance and if I ever find myself engaged in a wage-cutting cartel I’ll give myself a good talking to. For now, however, you’re miles off mark.

  • #849

    tommy
    Participant

    @troll The company’s accounts are interesting but they aren’t going to give you the level of detail you need to determine how much your particular role is worth. You don’t know the company profit margin on the contract/product you will be developing or what kind of penalties they might be in for if they don’t get someone with your skills quickly. So you are working with partial information when you calculate your ‘ask’ just like the company is working on partial information when they calculate their ‘bid’.

    The company is perfectly entitled to have a ‘feel’ for how much the job is worth taking into account how much they are paying others and to base their ‘bid’ on that (if HR in a group of large companies start determining ‘industry norms’ and agreeing they won’t exceed them that is a lot more dodgy). Similarly the employee can have a feel about what they think their services are worth and base their ‘ask’ on that rather than on what they are making now. Using the tax system to force an supplier – in this case a potential employee – to disclose true values for information which they would prefer to keep confidential because it weakens their negotiating position is not fair.

  • #850

    sammy
    Participant

    Unlikely it will be checked. If it does come up just say around 15k was paid as an annual bonus based on performance. P45 doesn’t cover bonus payment dates etc.

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