I work for a small community bank in South Carolina that recently merged with a larger regional bank.

I am interviewing for a position with the new bank. I was asked my expected salary and was told it was in range ($60,000-$65,000). I had a total of 3 meetings with three levels of management.

The offer came in at $52,000 with a $7500 relocation bonus. When I spoke with HR about the low-ball offer, one of the things she said was that because of my current salary of $45,000 it would be too high of a jump to get to $60,000.

The position is in a different line of business than what I’m currently working. I feel the company waited until they had access to my HR file to see what I’m currently earning before they made me an offer. I countered the offer but they came back with the original offer, nothing changed.

Is there any illegal activity in basing a new salary on a current salary when presenting an offer? Or more to the point, is this normal or common?

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    Why do you think this would be illegal? You're not below minimum wage, and they're using their own information to determine your salary. If you're not happy with the salary, find a job at a company willing to pay you better. – Dukeling Dec 27 '17 at 16:54
  • It's somehow necessary the dates above on the question? It doesn't seem to effect nothing if removed and can be more general and faster to read if removed. – William-H-M Dec 27 '17 at 17:03
  • @William-H-M You can always propose an edit. It will then be reviewed by people who high reputation who will decide if the edit helps or hurts. – Chris E Dec 27 '17 at 17:26
  • This question asks about a general practice that isn't all that uncommon, as such, it's not asking for company-specific advice, but for advice on a broader overall practice. Voted to re-open. – PoloHoleSet Dec 27 '17 at 19:38
  • @PoloHoleSet I've added a bit at the end which takes it hopefully away from the inevitable ERMAGHERD LEGAL argument and will vote to reopen. – Chris E Dec 27 '17 at 21:09

Companies do this, but the fact is that your compensation is supposed to be based on the work you do now, not the work you used to do. They agreed that $60K - $65K was in the compensation range for this particular position.

If you accept the offer, they will be underpaying you to the tune of $10K+ per year, or 15%+ under the appropriate wage. Not sure why what you are currently making comes into the picture, because that's irrelevant to the new position. Basically they are saying they are going to punish you for having an employment history for them, because if you were an outsider coming in and they could not peek into your compensation, you'd be getting paid the range you originally discussed. Who says "Thank your for being a valued and loyal employee. Now bend over...." - rhetorical question. Your new employer is who, obviously.

There's nothing illegal about trying to grossly underpay a worker for a job and low-balling them. There's no expectation of privacy about your current wage from your employer (who pays that wage), so there's nothing illegal about having the information and choosing to use it. There's nothing illegal about you declining and starting to look elsewhere, either. There's nothing illegal about you accepting the offer, but I can't say it's particularly smart to tell your new employer that you're willing to be a doormat for them. The idea that you'd cave in and accept a grossly inadequate offer, and that this will somehow position you for a raise to a fair and equitable wage in the future is kind of an unrealistic interpretation.

The company already has shown a willingness to underpay for arbitrary reasons, and to try and strong-arm you into it (ignore the counter-offer, while offering no legitimate reasons). Why would you think that would change, at all, and why would you think it would change after you rewarded their behavior and showed them it will work on you?

Stay put and find a new job where you are, unless you think the job market is better in the new location, but if you decide to look for a new position in the new location, make sure there aren't strings attached or claw-back provisions for the relocation money.

It might be better to accept, because declining and staying at your current wage might be an indication to them that you might be looking to leave, and they might drop the hammer on you if they can line up a replacement, so if you decline and decide to look for something else where you are (if you like where you are living), maybe give a reason (only if asked) that the differential isn't enough to entice you to leave the community you like so much.

Also - relocation money. Some companies directly pay for the relocation. In this case, it looks like they are giving you a bonus for that relocation. If your relocation costs are anywhere near $7500 you get screwed in the deal, because you pay FICA, federal and state taxes out of that bonus. Also, under the new GOP tax plan, you can no longer deduct moving expenses if you itemize on your federal taxes (as of January 1, 2018), so there's no re-couping that. Make sure you don't view that relocation bonus as $7500 to pay for relocation. It will probably be closer to $4000 in real moving money. A standard agreement I used to see was where they'd give a bonus for the typical estimated cost of the move, plus a "gross-up" so the after-tax net winds up covering the move. If you wind up losing money on the move, that's another consideration when evaluating the offer.


Is there any illegal activity in basing a new salary on a current salary when presenting an offer?

In your situation, unfortunately for you, the company did what most companies would do and took a look at your current salary and used it as a factor for your current offer. Is this fair? Probably not, but it is reality none the less.

Your only options at this point are to either accept it, and hope to move up salary wise on future reviews, or to stay put. I think that it is still a good jump from where you are currently, and with the bonus you should be doing pretty good financially.

My advice to you would be that if your only objection to the offer is the money, go ahead and take the offer is everything else is better for you. Once you're in the position with the new title, perhaps you can push for more money during the review period. If not, hopefully this new position will help launch you to a better one at another company down the line.

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    Or get the full pay with another company. Clearly you could get that money, just not with these people. – Erik Dec 27 '17 at 19:30

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