California Clarifies Salary History Ban Law

By SHLC on November 17, 2018 in Uncategorized
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Governor Brown signed the Fair Pay Act Bill, also known as AB 2282, on July 18, 2018. The Fair Pay Act Bill clarifies ambiguities in Labor Code Sections 432.3 and 1197.5, which were created with the passing of AB 168 in 2017.

 

AB 168

AB 168 was intended to eliminate the gap in pay between male and female workers. Employers were 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 was that prior pay was likely influenced by discriminatory reasons, biases, or decisions.  In eliminating the ability to inquire about salary history, the law aimed to put male and female workers on more equal footing.

 

Read our blog on this topic here.

 

AB 2282

Current law requires an employer, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment. The new legislation, which will go into effect on January 1, 2019, clarifies three important aspects of existing law.

 

First, it defines the terms “pay scale”, “reasonable request”, and “applicant”.

 

A “pay scale” is defined as the salary or hourly wage range.

 

A “reasonable request” means a request made after an applicant has completed an initial interview with an employer.

 

An “applicant” is an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.

 

Second, the bill does not prohibit an employer from asking an applicant’s salary expectation for the position being applied for.

 

Finally, employers are allowed to “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” of a: (1) seniority system, (2) merit system, (3) system that measures earnings by quantity or quality of production; and (4) bona fide factor other than race or ethnicity, such as education, training, or experience.

 

For more information, you can read the full text of Assembly Bill No. 2282.

 

Recommendations

  • Revise interview questions to ask applicants “What is your salary expectation for the position being applied for?”
  • Review application and eliminate questions asking about an applicant’s salary/rate of pay history.
  • Train hiring personnel, including recruiters, to ensure compliance.

 

New California Legislation, including AB 2282, will be discussed during our next webinar. Sign up for Sutton Hague Law Corporation’s upcoming webinar “2019 Legal Update for CA Employers: What You Need To Do Now” scheduled for December 4, 2018 at 12:00 pm (PT). For more information and registration, visit: http://suttonhague.com/events.