McLeod Witham

California Prohibits Salary History Inquiries During The Hiring Process

Synopsis: 

California Joins A Growing Number Of States And Cities In An Attempt To Remedy Wage Disparities 

Governor Brown also recently signed A.B. 168, which adds Section 432.3 to the Labor Code as of January 1, 2018. 

 Labor Code Section 432.3 prohibits employers from:  (i) relying 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; and (ii) seeking the salary history information – including compensation and benefits – about an applicant for employment.  In addition, the newly enacted Labor Code Section requires employers to provide the pay scale for the position for which the applicant is applying upon “reasonable request.” 

 Labor Code Section 432.3 does not, however, prohibit an applicant from “voluntarily and without prompting” disclosing salary history information to a prospective employer.  Under such circumstances, the employer many consider the voluntarily disclosed salary information in “determining the salary for the applicant.”  As a result, even if an applicant voluntarily discloses their salary history information, an employer cannot use such information in determining whether to extend an offer of employment in the first place. 

 California joins Massachusetts, New York City, and Puerto Rico in banning salary history inquiries during the hiring process and several other cities and states are considering similar legislation.  Advocates of banning the use of salary information believe it will help remedy pay disparities for women and minorities as using salary history as a factor in setting compensation with a new employer perpetuates wage disparities.