California has enacted new legislation aimed at clarifying its law banning an employer from inquiring about a job applicant’s salary history information.
Assembly Bill 168 (codified as Labor Code Section 432.3) prohibits employers from seeking salary history of applicants for employment. Designed to eradicate the wage gap, AB 168 also requires employers to provide applicants, upon reasonable request, with the pay scale for the position.
Since the salary history ban’s enactment in January 2018, employers have struggled to understand the restrictions it imposes, as it fails to define key terms, such as “applicant,” “reasonable request,” and “pay scale.” On July 18, 2018, Governor Jerry Brown signed into law Assembly Bill 2282 to clarify the intended meaning of these terms.
AB 2282 defines “applicant” or “applicant for employment” as an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.
It defines “pay scale” as a salary or hourly range and provides that a “reasonable request” for such pay scale is a request made after an applicant has completed an initial interview.
AB 2282 additionally seeks to address the legality of an employer’s questions related to an applicant’s expected salary. Although several local ordinances adopting salary history bans permitted employers to inquire about such information, AB 168 was silent on the issue. AB 2282 expressly provides that employers are not prohibited from asking an applicant about his or her salary expectation for the position being applied for.
Finally, AB 2282 authorizes employers to consider a current employee’s existing salary when making a compensation decision, so long as any disparity resulting from that decision is justified by a seniority system, merit system, or other bona fide factor unrelated to the employee’s sex, race, or ethnicity.
Employers should revisit and revise their hiring practices and policies to ensure compliance with the laws in the states in which they operate. Jackson Lewis attorneys will continue to monitor pay equity developments. Please contact us with any questions about the potential implications of AB 2282 or other legal developments.