Governor Jerry Brown signed Assembly Bill 168 today, to add new section 432.2 to the California Labor Code. The new law will go into effect on January 1, 2018.
The new law makes it unlawful for an employer in California to:
- Rely on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant; or
- Orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant for employment;
Of course, an employee is free to voluntarily disclose his or her prior salary, but the employer may not "prompt" an employee to disclose it. The law also makes clear that if the applicant does voluntarily disclose a prior salary, the employer may at that point rely on the prior salary in determining the appropriate salary for the applicant.
The law also imposes a new affirmative obligation on employers. If an applicant makes a reasonable request, the employer must provide "the pay scale for a position" to the applicant. This requirement may be tricky for smaller employers who may not have a "pay scale" for every position.
The purpose of the new law is to help eliminate the "perpetuation" of disparities in pay that may be due to bias against women and other minorities in the workplace. Employers might argue that they only want to know salary history so that they can understand the applicant's salary expectations. If that's the case, employers should note that there is nothing in the new law to prohibit employers from asking, "What do you expect to be paid?"
Employers should review their applications and interview questions prior to January 1 and make any revisions as necessary.