Note: All bills become effective January 1, 2018 unless stated otherwise.
AB 168 – Ban on Salary History Inquiries
NEW LAW: Effective January 1, 2018, California employers cannot ask a job applicant about his or her prior salary or seek out an applicant’s salary history through a third party. Employers may consider prior salary information that an applicant voluntarily discloses (but don’t forget that under Labor Code Section 1197.5, employees may not use an applicant’s salary history alone to justify a pay disparity). Furthermore, employers will now be required to provide a pay scale for a position whenever a job applicant inquires.
The intent of this law is to narrow the gender wage gap by preventing employers from basing offers on prior salary information and, thus, perpetuating historical lower pay for female employees. In that regard, California has followed a recent trend of “salary history ban” legislation; San Francisco banned salary history questions earlier this year and other jurisdictions, including New York City, Philadelphia, Puerto Rico, Delaware, Oregon, and Massachusetts, have all adopted similar laws.
REED SMITH RECOMMENDS: All recruiters and interviewers should be informed of the ban on salary history inquiries, and any job application materials or interview scripts which ask for such information should be revised immediately. Employers may still ask an applicant how much he or she would like to be paid or expects to be paid, which will provide a sense of the employment market and an applicant’s salary expectations without violating this new law. Employers should also prepare basic informational forms providing the pay scale for open positions or positions that may become open within the next few years so that this information is readily available if requested by job applicants. Finally, given the pay scale requirement of AB 168 and the potential liability facing employers for any gender wage gap following the passage of California’s Fair Pay Act in 2016, employers should seriously consider conducting a compensation audit to internally evaluate whether any gender-based wage discrepancies exist.
Continue Reading California’s Employment Law Class of 2017: The Summarized Laws and Recommendations for Compliance