AB 168 – Prohibits an Employer from Seeking an Applicant’s Salary History Information

Category: Public Agencies
Date: Dec 1, 2017 11:57 AM

AB 168 is another effort by the California Legislature to address gender-based pay inequities. According to the bill’s sponsors, females are more likely to have a lower starting salary in their first job than males, and also are more likely to take extended time off from work during their career. The pay inequity that results from these conditions is perpetuated, said the bill’s sponsors, by basing hiring and compensation decisions on an applicant’s prior salary.

To break this cycle, AB 168 prohibits an employer from seeking, either directly or indirectly, information about a job applicant’s salary (including compensation and benefits) in prior employment. The employer cannot include such a question on a job application nor ask one in a job interview. Additionally, the employer may not ask the applicant’s former employer, references, or a background investigator for the applicant’s past salary history information.

AB 168 also makes it illegal for an employer to rely on an applicant’s past salary history when deciding whether to hire the applicant. Specifically, the bill says that past compensation cannot be a factor in the hiring decision. Thus, even if past salary is not the determinative factor, the mere fact that it was considered makes the hiring decision illegal.

AB 168 includes two important exceptions:

An employer may seek and use salary history that is disclosable under state and federal public records laws. Thus, if the applicant formerly held a position with a federal, state, or local government employer whose salary is public record, the prospective employer may ask about and consider the applicant’s salary history with the public employer. 

If the applicant voluntarily provides compensation history, an employer may use that information to determine what salary to offer the applicant, but may not use it to decide whether to hire the applicant.

AB 168 also requires an employer to provide an applicant, “upon reasonable request,” the pay scale for the position sought. And, unlike other Labor Code sections prohibiting certain inquiries of applicants, a violation of AB 168’s prohibitions is not a misdemeanor.

Employers should review their employment applications and interview procedures to ensure they do not ask about or consider an applicant’s salary history from prior private employment. Employers may also want to look at using alternative methods to determine the salary placement of new employees that do not include the use of prior salary history.  Employers are advised to work their legal counsel to determine compliance with this new law.

(AB 168 adds Section 432.3 to the Labor Code.)

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