California Prohibits Salary History Inquiries Starting January 1, 2018

AB 168 takes effect on January 1, 2018, prohibiting all California employers from relying on the salary history information of an applicant for employment as a factor in determining whether to offer a position, or in deciding what salary to offer. The law defines “salary history” to include both compensation and benefits.

The law will also prohibit an employer from seeking or requesting salary history information about an applicant, either in writing or orally. This means that questions regarding salary history must be removed from employment applications. Employers also cannot ask the applicant how much he or she previously earned when conducting interviews. Employers are also prohibited from seeking this information through third parties, such as recruiters.

The law will not prohibit an applicant from voluntarily disclosing his or her salary history information to a potential employer.  However, this voluntary disclosure must be “without prompting.” Thus, advising an applicant on an employment application that they are free, but not required, to disclose their previous salary history would run afoul of the law.

If an applicant voluntarily discloses his or her previous salary history without prompting, the new law will not prohibit an employer from considering or relying on that voluntarily disclosed information in setting the applicant’s salary. For example, if during the interview, an applicant voluntarily discloses how much she earned at a previous job, and states that she will not accept new employment unless it pays more, the employer is free to take this into consideration when deciding on the applicant’s compensation.

The law will also require an employer, upon reasonable request, to provide the pay scale for the position sought by an applicant.

Employer Action Items:

• Remove any references to previous salary history from employment applications. (Also make sure to remove any questions regarding criminal history to comply with California’s new “ban-the-box” law.)
• Train any individuals in your organization who administer the application process, conduct interviews, or make hiring decisions, on their obligations under the law.