In what way? Who is harmed? In which jurisdiction?
It's somewhat like lying about a credential.
Also, I could be wrong but I don't think a new employer will contact a previous employer to specifically learn how much a particular individual was earning.
This isn't the question that I answered. It was asked how stating a specific, untrue salary might be fraud.
Refusing to answer and giving an untrue number are different.
> Also, I could be wrong but I don't think a new employer will contact a previous employer to specifically learn how much a particular individual was earning.
Lying doesn't mean you'll get caught.
Also, be careful. For example, during a background check for one my jobs (a rather "ordinary" one), they said they couldn't verify one of my previous employers, and asked if I could send them proof. I sent W2s for both years I was employed and my offer letter, which satisfied them. Maybe some would feel that's too remote a risk to worry about, but it's not out of the question.
But don't lie to them, especially if they're going to pay you more because of that lie.
The salary negotiation is a completely separate event.
If the potential recruitee said "I'm looking for $X" they're not deceiving anyone.
I've seen how a hiring company might look at a person who wants $X, but earns lower-paying figure and think, "Well, market pay is $X, but if the company before was paying them $X-20%, we can get away with offering $X-15% or $X-10% because it's a marginal increase for the applicant and we still save money."
evilduck, below: nails it with this[0]:
"companies aren't going to tell your their actual upper bounds for what they'll pay in salary, why should you tell them your actual lower bounds? "
I'm just saying that lying about your previous salary in order to get a higher starting salary is pretty clearly fraud. While it's unlikely to ever be prosecuted it is probably grounds, as has already been said, to withdraw the offer or to fire someone.