California Law Bans Employers from Asking for Salary Information

Written by Jonathan Wiersma

Beginning January 1, 2018, California employers may no longer ask job candidates, in writing or orally, for their current or previous salary information. In addition, employers must provide applicants, upon request, with a pay range for the open position for which the applicant has applied. The change comes in response to Assembly Bill No. 168, which was passed by the California state legislature on October 12, 2017. The bill applies to both public and private sector California employers, regardless of size.

The legislation states the following:

(b) An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant for employment.

(e) This section shall not apply to salary history information disclosable to the public pursuant to federal or state law.

(f) This section applies to all employers, including state and local government employers and the Legislature.

Employers should note that if an applicant “voluntarily and without prompting” provides his/her previous salary information, the employer may use it “in determining the salary for that applicant.”

Narrowing the Gender Wage Gap

The purpose of the legislation is to minimize the gender wage gap. The bill’s supporters state that if a woman is paid less than a man in the same job role, and a new employer bases her compensation package on her previous salary, gender salary discrimination will perpetuate. The bill aims to mitigate this trend by ensuring all applicants—regardless of gender, are given the same opportunities relative to salary considerations.

Human resource managers in California may see a correlation between this new law and one passed in 2016 that stated that prior compensation, by itself, cannot justify any disparity in compensation. Assembly Bill No. 168 aims to further the state’s commitment to gender equality in salary compensation.

Other State and City Efforts

California is not alone in its efforts to narrow the gender wage gap. Delaware, Massachusetts, and Oregon have passed similar laws that will go into effect in 2017 or 2018, and the cities of New York and San Francisco have already implemented similar ordinances. The San Francisco ordinance takes the effort a step further by banning employers from releasing a current or former employee’s salary without his/her consent.

Proactive Compliance

In compliance with this new requirement, the salary fields, and all existing salary information will be removed from the CivicHR® Applicant Tracking system for all California clients by December 31. Clients with any questions regarding this new legislation should contact their CivicHR account manager.

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