There are many employers who feel that they're entitled to your salary history.

Ooh, lesson time! First, never give in on this one, unless compensation is relevant to your story (it's why you're leaving). It's best to say, "I believe that I was fairly compensated for the work I was doing, and I also believe I'm capable of doing more." It's a non-answer. You want to bring the discussion back to what you can do, not what you cost. Let them figure that out and give the first number. Leave the "salary" field on a job application blank. If they like you, they're not going to care.

Why do companies ask for this information? It doesn't have much of an influence on what they'll pay you. It might swing their number by 10 or 15 percent at most. Mainly, they want you to scout against the competition for them. The information you are volunteering has nothing to do with you but it's extremely valuable for their HR departments.

Moreover, that practice has to do with executives and the way they're compensated. Executives usually get severance packages baked in to the employment contract, but when companies fire people, they want to see if there's a way to get rid of them without paying these packages. Usually, any falsification in the job application process is cause to strike a package. So before a company is going to write a 3-year severance check, they want to do their research and see if they have leverage to negotiate it down or away.

You know those stories that you hear about where an executive is fired for falsifying a college degree, even if it was on some technicality like a $35 library fine that blocked his graduation (and that he had completely forgot about, 20 years later)? Those are cases where the company had already decided to fire him, and started to scout around to see if it could do so more cheaply. Depending on the structure of the arrangement, they either (a) struck the severance on account of what they found, or (b) threatened to disclose it if the employee didn't take a reduced package. The latter of these is illegal (extortion) but it happens all the time in severance negotiations with scummy companies.

Moreover, executive pay is complicated. Does one count stock options at the price then, or at the price now? How are projected bonuses, in a job the person hasn't yet left, handled? It is legit to change $100k base and $30k performance bonus to $80k and $50k? Representing salary as too high is construed as "misrepresentation", but salaries that are too low (trend improvement) can be taken the same way. It's like the fast-lane paradox: if you follow the law to the letter, you can't legally drive in the left-hand lane in most states, because it's illegal to drive below the speed limit and (of course) it's illegal to drive above it. So this is a very murky area.

Why do companies ask for salary information on non-executive employees as well? Because people will give it up. It's that simple. It costs nothing to ask, and people will usually volunteer the information.

I generally don't offer those numbers. If I do, I give the total package (counting equity at valuation) for the last job and omit the rest of the numbers, and I never put it in writing. (My salary history has always been good and with upward trend, so it's not exactly a problem, but I don't like giving it out.) What I made in 2006 is not relevant to anything.

Oh, and if a company ever asks for a W-2 form as a condition of employment, to verify salary or bonus, run like the fucking wind. You don't want to work with people like that. Trust me.