Last year, California joined several other states and municipalities around the country banning salary history interview questions. The law became effective on January 1, 2018. No doubt, you've heard about this law and the questions that arose after it became effective.
What does this law prohibit?
This law prohibits employers from asking applicants about what they made in past roles. It also prohibits employers from determining what to pay someone based on what they have made in past positions. The new law also requires employers to provide the pay scale for the position upon a reasonable request by the applicant.
That seems ambiguous
It is. Employers raised many questions about the new law which created great uncertainty. That's why in July, Governor Brown signed a new law clarifying some ambiguity in the original law. The law goes into effect on January 1, 2019.
The new law defined three of the previously ambiguous terms:
- Applicant: any person who seeks employment with the employer who is not a current employee
- Pay Scale: the salary or hourly wage range for the position
- Reasonable Request: a request made by any applicant after completion of an initial interview
What else is changing?
The modified law also expressly permits employers to ask applicants about their salary expectations. “What do you expect to make?” The employer still cannot ask what the applicant has made in previous jobs.
For current employees who might have a pay disparity, the law addresses this, too: "Prior salary shall not justify any disparity in compensation. Nothing in this section shall be interpreted to mean that an employer may not make a compensation decision based on a current employee's existing salary, so long as any wage differential resulting from that compensation decision is justified by one or more of the factors listed in this subdivision." Those factors include a seniority system, a merit system, a system that measures wages by quantity or quality, and other legitimate means of determining compensation, such as education, training, or experience.
What should employers do?
As a California employer, it is your duty to make certain your HR personnel and the people conducting your company interviews understand and adhere to California's ever changing labor laws. One small slip can cost you a good employee, embarrassment, and be extremely costly. As a California employer, intentionally or accidentally ignoring the law benefits no one. You owe it to yourself and your company to ensure you have the knowledge necessary to conduct your business in compliance with the law.