Surveillance wages exposed

A compensation analyst from a Fortune 500 company just described a hiring practice that sounds less like recruiting and more like airline pricing: software estimates what one person will accept, then aims the offer just above that floor. The allegation centers on salary-history data, debt signals, and payday-loan markers being used to tune pay to an applicant’s pressure point. (x.com) That is different from the old version of wage bargaining. A recruiter used to guess from a résumé and a conversation; now a data broker can deliver payroll records that are refreshed each pay cycle, and Equifax says its The Work Number system contains more than 618 million records. (workforce.equifax.com) (totalverify.equifax.com) Equifax markets that database as a way to verify income and employment, and says employers send records each payroll cycle while credentialed organizations can access the data in near real time. Equifax also says pre-employment products can give a “more complete view of candidates” before a hiring decision is made. (workforce.equifax.com 1) (workforce.equifax.com 2) The jump from verification to offer-setting is where the story turns. Checking whether a candidate worked at Company A for three years is one thing; using past pay, debt stress, or short-term borrowing to decide the lowest acceptable offer is a different use entirely. (ftc.gov) (consumerfinance.gov) The debt part matters because payday loans are not ordinary credit-card balances. The Consumer Financial Protection Bureau describes payday loans as short-term, high-cost loans, and its research found many borrowers end up in loan sequences rather than one clean repayment. (consumerfinance.gov 1) (consumerfinance.gov 2) If software treats that kind of borrowing as a sign that someone cannot hold out for a better offer, the model is no longer measuring job value. It is measuring financial strain and converting it into employer leverage. (consumerfinance.gov) (x.com) There is already a legal reason companies were pushed away from salary history even before generative artificial intelligence became a boardroom obsession. States and cities began banning salary-history questions because anchoring new pay to old pay can carry past discrimination forward into the next job. (mass.gov) (paycor.com) Massachusetts law, for example, says employers may not ask about wage or salary history until after an offer with compensation has been made. Pay transparency laws in several states now also require salary ranges in postings, which cuts against any system built to personalize offers in the dark. (mass.gov) (paycor.com) Federal law adds another layer. The Federal Trade Commission says employers using consumer reports for hiring must follow the Fair Credit Reporting Act, and the law requires notice when an adverse action is taken based on those reports. (ftc.gov 1) (ftc.gov 2) The awkward question is what counts as “adverse” when the candidate still gets hired. If a report does not knock you out of the process but quietly pushes your offer down by $8,000, the harm is real even though the rejection email never arrives. (ftc.gov) (ftc.gov) Civil-rights agencies have been warning that automated employment tools can still break discrimination law even when no human manager types a slur or asks an illegal question. The Equal Employment Opportunity Commission and three other federal agencies said in a 2023 joint statement that existing laws already apply to automated systems, and the Equal Employment Opportunity Commission says artificial intelligence in employment decisions can violate anti-discrimination rules. (ftc.gov) (eeoc.gov) So the issue is not whether a spreadsheet or a model made the number. The issue is whether total-rewards teams are building a pay system that prices labor by market value, or a surveillance system that prices desperation. (eeoc.gov) (x.com)