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December 10, 2019

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California’s Ban on Salary History Inquiries Takes Effect January 1, 2018

California joins Delaware, Massachusetts, Oregon and several municipalities, including New York City and San Francisco, by banning inquiries into salary history. Aimed at combating wage disparity based on gender, the new law (AB 168), to be codified at Labor Code section 432.3, prohibits employers from seeking or relying upon salary history information.

Ban on Seeking Salary History Information

AB 168, which goes into effect on January 1, 2018, prohibits employers from seeking salary history information about applicants for employment. Specifically, employers may not, orally or in writing, seek salary history information, which includes compensation and benefits. The new law also prohibits employers from seeking such information through agents such as headhunters or recruiters.

Ban on Relying Upon Salary History Information

AB 168 also prohibits employers from relying upon salary history information to determine whether to offer an applicant employment or to set salaries. However, if an applicant voluntarily and without prompting, discloses salary history information, an employer may consider it in determining the applicant’s salary.

Last year, California amended the Equal Pay Act to state that “[p]rior salary shall not, by itself, justify any disparity in compensation.” AB 168 takes a step further by prohibiting employers from relying on salary history as a “factor” in determining what salary to offer.

Mandate to Provide Pay Scale Information

In addition, AB 168 requires employers, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment. Thus, if an applicant for employment seeks the salary range for a position, an employer must disclose it.

Related Developments

On October 16, 2017, Governor Jerry Brown vetoed AB 1209, which would have required employers with 500 or more employees in California to collect information on gender wage differentials for exempt employees and board members and disclose the information to the California Secretary of State. In turn, the bill would have required the Secretary of State to publish the information on a public website. Governor Brown noted in his veto memorandum that although transparency is often the first step to addressing a problem, the bill as written “could be exploited to encourage more litigation than pay equality.” Governor Brown’s veto is a welcome development for employers.

Takeaways for Employers

AB 168 applies to employers of any size. California employers should review their employment applications and recruiting and hiring processes to ensure that they do not impermissibly seek or rely upon salary history information. In addition, employers should train all those involved in the recruiting and hiring process about the new law’s requirements.

 

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About this Author

Lynne Anne Anderson, Drinker Biddle, Lawyer, Employment Litigation
Partner

Lynne Anne Anderson is a practiced jury and bench trial lawyer who handles a wide range of employment litigation, including whistleblower cases, restrictive covenant disputes and wage and hour class/collective actions. Her litigation background gives her the insights necessary to effectively counsel clients who are dealing with frontline employee issues to effectuate a win-win resolution of workplace disputes, and to implement policies and protocols to limit litigation. Lynne is Co-Chair of the Labor and Employment Group's Fair Pay Act Obligations Team...

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Kate Gold, Labor and Employment Attorney, Drinker Biddle
Partner

Kate S. Gold defends clients in employment and other business disputes in state and federal courts, arbitrations, and before agencies. She is Co-Chair of the Labor and Employment Group's Fair Pay Act Obligations Team.

Kate’s practice includes defense of individual, collective and class actions and focuses on business and employment litigation and counseling. She handles matters involving wrongful termination, retaliation, whistle blower, sexual harassment, race, age, family leave, pregnancy and disability discrimination; defends actions for misappropriation of intellectual property and trade secrets, interference with contract, and unfair competition; counsels on compliance with federal and state employment laws, including wage and hour, classification of employees, employment issues in the context of purchase and sale of businesses, and non­competition agreements; negotiates and drafts executive employment and separation agreements; and prepares employee handbooks and policies.

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Irene Rizzi, employment litigation lawyer, Drinker Biddle
Associate

Irene M. Rizzi represents clients in a variety of employment-related disputes including discrimination, harassment, retaliation, wrongful termination, and wage and hour compliance. In addition, Irene counsels employers on pre-litigation matters, conducts trainings and presentations, and assists clients draft, review, and revise employee handbooks, human resources policies, and employee contracts. Irene also advises clients on labor and employment due diligence matters and potential exposure analyses in connection with corporate transactions and...

415-591-7578