California Passes Statewide Ban on Inquiries into Salary History

By SHLC on October 16, 2017 in Legal Update
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Assembly Bill 168 (“AB 168”) was signed into law on October 12, 2017, and imposes a statewide ban on inquiries into an individual’s salary history.  AB 168 is the latest effort to eliminate gender pay inequality in the state. With AB 168, California joins many other jurisdictions across the country that prohibit an employer from asking an applicant about salary history.

The new law goes into effect on January 1, 2018, and is motivated by an effort to eliminate the gap in pay between male and female workers. An employer is now forced to base compensation on the value of the position, rather than the individual applicant’s previous pay.  The argument against asking for prior pay history is that prior pay was likely influenced by discriminatory reasons, biases or decisions.  In eliminating the ability to inquire about salary history, the law aims to put male and female workers on more equal footing.

AB 168 applies to all employers, including state and local governments, and prohibits employers from using an individual’s prior salary history as a factor in determining: (1) whether to offer an applicant employment; or (2) what salary to offer the applicant. While an applicant may still voluntarily disclose salary history, an employer is prohibited from asking directly, or indirectly, for the information. For example, an employer is prohibited from inquiring indirectly about an individual’s salary history by asking a previous employer for the information. However, the law does not apply to salary history information available to the public pursuant to federal or state law. Further, an employer must now provide an applicant with the pay scale assigned to the position sought upon reasonable request.

Recommendations for Employers

  • Review application and eliminate questions relating to rate of pay.
  • Review and revise hiring procedures and applications to eliminate any questioning relating to an applicant’s salary history and establish a pay range before advertising an open position.
  • Train hiring personnel, including recruiters, to ensure compliance.

New California Legislation, including AB 168, will be discussed during our New Year Employment Law Update for California Employers Webinar on Thursday, December  7, 2017. For more information and registration, visit: http://suttonhague.com/events 

View the text of the bill, here.