It’s Official - Asking for Prior Pay History in CA is Now Illegal

California Governor Signs AB168

We’ve written about it previously and now it’s law. Governor Jerry Brown signed AB 168 into law. Now California joins Delaware, Puerto Rico, Oregon, Massachusetts, New York City, Philadelphia San Francisco in "prohibiting employers from asking job applicants for “salary history information.” This term includes both compensation and benefits.

Section 432.3 will prohibit employers from asking about or relying on prior salary information in deciding whether to offer a job and in deciding how much to pay, however, it will give employers a pass when an applicant, “voluntarily and without prompting,” discloses salary history information. In that case, the law will not prohibit the employer from relying upon the volunteered information in setting the applicant’s starting salary. Remember though that the California Fair Pay forbids employers to rely on prior salary, by itself, to justify any disparity in pay.

California will be the first jurisdiction in the country to require that employers provide applicants with the pay scale for a position, upon “reasonable request.”

This law applies to “all employers”—both private and public—and will become effective January 1, 2018.

As a reminder, here are some tips for ensuring your procedures comply with the requirement and to aid in defense if you are accused of discrimination:

• Do not ask salary history from applicants;
• Document all factors that contribute to an initial pay determination including, but not limited to, educational history, degree, prior employment experience, special skills and expertise, individual candidate negotiations, market factors, and other position-specific factors;
• Document how each factor contributed to pay and the specific reasons for the rate of pay chosen;
• Periodically evaluate whether initial differences in pay should be reduced over time when employees have substantially similar job duties and responsibilities.

Lauren Sims is the article author and the Director of Human Resources Consulting for eqHR Solutions.

Whenever you require professional Human Resources or Payroll guidance to navigate the ever-changing landscape of California and Federal Employment Laws & Regulations, contact us for a no-obligation consultation.

eqHRSolutions offers professional, tactical and strategic, human resources support, ADP payroll product implementation/training and payroll processing services for businesses throughout Southern California.