New Law 2018 – Pay Privacy

Photo by Ben White on Unsplash

“What did you make at your last job?” will be an illegal question when asked of a job candidate in 2018.  California’s Governor Jerry Brown signed AB-168, the salary privacy bill, into law on October 12, 2017.  The law goes into effect on January 1, 2018, and applies to all California employers regardless of size and whether they are in the private or public sector.

There are three main parts to the new Section 432.3 of the California Labor Code:

  1. An employer shall not rely on an applicant’s salary history as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.
  2. An employer shall not, in any way, either directly or indirectly through third parties, seek an applicant’s salary history information (compensation and benefits).
  3. An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.

However, employment applicants may voluntarily disclose their prior salary history (without prompting), in which case, the employer may use the voluntarily provided salary history in determining that applicant’s salary.  But employers must remember that even though employers may use an applicant’s salary history to determine the applicant’s salary when the information is divulged voluntarily, employers may not use the prior salary history information to justify disparities in pay unless such disparity meets the requirements of the Equal Pay Act.

PRACTICAL TIP:  California employers have just a couple of months to ensure that your hiring process does not violate the new pay privacy law. Employers should use this time to review and modify your employment applications, interview questions, and salary formulas.  Update, or create, standard interview questions as well as a list of questions to stay away from.  Once those interview questions are updated, educate and train every person who would have the opportunity to interview job applicants so that everyone in the hiring process may effectively evaluate candidates without creating liability for the company.

If you have questions about California’s new pay privacy law making it illegal for employers to ask for salary history information, feel free to contact me or call (949) 529-0007.

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In: Employment Law, New Laws

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