The 12 days of California Labor & Employment Series – Day 2 "Salary History"

It's the end of the year and while everyone is busy, employers in California should be aware of new laws and regulations that go into effect on January 1, 2018. In the spirit of the season, we are using the next "12 days of the holidays" to blog about one California law each day and the law's impact on California employers. On the Second Day of Christmas, my Labor and Employment attorney gave to me – two turtledoves and AB 168.

AB 168 prohibits California employers from seeking salary history information from a job applicant. As of January 1, 2018, an employer or their agents are not permitted to directly or indirectly, written or orally, ask for information regarding the history of an applicant's salary, compensation or benefits. In addition, an employer cannot rely on an applicant's salary history as a factor to determine whether to offer the applicant a job or determine what salary to offer the applicant. Further, if the applicant requests it, California employers must provide a pay scale for the position in which the applicant applied. The purpose behind AB 168 is to assist with pay equality. This law will be encompassed in section 432.3 in the California Labor Code. 

Despite this new law, an applicant is able to volunteer any information they wish to regarding their salary, compensation and benefit history. If the applicant does make a voluntary disclosure, the employer is free to use it to determine whether to extend a job offer or to decide what compensation to offer. Note that per the Equal Pay Act, the prior salary cannot, by itself, be used as a justification for any disparity in compensation between employees of different races, sexes or ethnicities. 

What do California employers need to do? Employers should ensure their human resources staff and/or any employee involved in the application review process or job interview process is aware of these new restrictions and trained on how to address the new law. Employers should also review their job applications to ensure compliance. Lastly, employers should ensure that they have a pay scale for posted/open positions in the company so the information is readily available if requested.