New Guidance on California’s Salary History Ban

Employers looking to move into California or expand operations in the State should familiarize themselves with California’s salary history ban. The law, enacted last year, prohibits employers from seeking or relying on salary history information about an “applicant” for employment. It also requires employers, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment.

The law left some of these terms undefined, leading to many questions from employers, including who qualifies as an “applicant.” AB 2282, which is effective on January 1, 2019, clarifies that term and other provisions of the law.

First, the new law defines “applicant” or “applicant for employment” to mean an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.

Second, “pay scale” means a salary or hourly wage range, but does not include bonuses or equity ranges. And, the law now defines “reasonable request” as a request made after an applicant has completed an initial interview with the employer. Thus, the new law clarifies that an employer is only required to provide pay scale information to an applicant who has completed an initial interview.

Third, the law clarifies that although employers are prohibited from asking for an applicant’s salary history information, employers may ask about an applicant’s salary expectations for the position.

Finally, while salary history cannot be used to justify a disparity in pay, the law makes clear that employers can consider current salary provided any wage differential is based on one or more enumerated factors. Those are: (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production; and (4) a bona fide factor other than race or ethnicity (such as education, training, or experience).

As we head into 2019, employers should ensure that all employees engaged in the hiring process understand what pay information they can obtain and give out, and when.

 

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