California Bans Salary History Inquiries for Job Applicants

Financial chart on chalkboardBy Anthony Amendola and Justine Lazarus

On October 12, 2017, California Governor Jerry Brown signed a significant piece of employment legislation that prohibits California employers from asking job applicants about their salary histories.  The new law will take effect on January 1, 2018.

Assembly Bill 168, which adds section 432.3 to the California Labor Code, is intended to promote equal pay, particularly between men and women.  It prohibits all California employers (including state and local government employers and the state Legislature) from

  • Seeking from job applicants, whether “orally or in writing, personally or through an agent,” salary history information (including both pay and benefits); and
  • Relying on salary history as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.

In addition, the new law obligates an employer “upon reasonable request” to provide “the pay scale for a position to an applicant applying for employment.” (The bill does not address whether an employer must establish a pay scale for all positions, and many employers do not have formal pay scales, particularly for higher level positions).

Notably, AB 168 does not prohibit an applicant from “voluntarily and without prompting,” disclosing his or her salary history, nor does it prohibit an employer from relying upon such voluntarily disclosed information. The law also does not apply to salary history information that is disclosable to the public pursuant to a federal or state law (e.g., the California Public Records Act, the federal Freedom of Information Act).

AB 168 does not specify any penalties.  However, violating Labor Code Section 432.3 would subject an employer to penalties under the California Private Attorneys General Act (“PAGA”) and possibly wrongful refusal to hire claims.

In enacting AB 168, California joins a handful of states (Massachusetts, Delaware and Oregon) and municipalities (New York City, Philadelphia and San Francisco) which have enacted similar measures.

Q: What should California employers do to comply with the new salary inquiry law?

Employers should review their employment practices and hiring materials, remove any salary questions, update interview and hiring policies and procedures, as necessary, and train hiring managers and interviewers to ensure they follow the new law during their conversations with job applicants.

 

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