Past salary is not an indication of future results
Q: I'm a college student. When you apply for jobs, some employment applications ask for the beginning and ending salaries of your current or last job. Is that legal? By listing the dollar amounts, you are [locking] yourself into a certain salary range, making it difficult to negotiate a higher wage. That seems unfair. Who regulates job applications, Uncle Sam or, in my case, the state of California?
H.A., Glendale, Calif.
A: Neither the US Department of Labor nor the California Labor Board regulate job applications, according to federal and state press spokespersons.
According to Tony Skogen, managing partner of Littler, Mendelson, a law firm in Los Angeles that specializes in labor issues, applications are private matters between a job candidate and an employer.
It is not mandatory that you fill out wage information, Mr. Skogen says. On the other hand, "the firm doesn't have to hire you, either, if you fail to answer the question."
Employers use applications to obtain background information to check out the skills and veracity of a potential worker. As a practical matter, says Skogen, "most jobs have a specific salary range" common to an industry or profession. So you are not usually being locked in by your prior salary.
Q: Our son, who is a full-time college student, will turn 23 next year. He lives at home and is fully dependent on us for financial support. He has no job. We pay for all his school books and classes and other daily expenses. Will we be able to keep him as a "dependent tax-exemption" despite his age or his student status?
E.S., New York
A: "It sounds like it, but first check out IRS Publication 501," on exemptions, says a spokesman for the IRS in Washington.
"There is no age test for dependency," the spokesman adds, although there are certain rules that apply to college students under age 24, such as your son. But if your son is living at home, has no income, and you are paying his way, it appears as though he is a dependent.
Q: What is a price to earnings "multiple"?
J.G., New York
A: It's simply another word used to describe a price-to-earnings ratio. To calculate that ratio, divide a stock's price by the company's earnings per share for the past year. The p/e is usually listed in stock tables. So if it is 20, for example, that stock sells at a "multiple" of 20 times earnings.