A Recent Trend in Employment Law
In recent years, the gender pay gap has become a hot topic on the national stage. Several states, including Delaware, Massachusetts, and Oregon, have passed similar laws to AB 168. Certain cities have also joined the growing trend with Philadelphia, New York City, and San Francisco all banning salary history inquiries.
Two years ago, Governor Brown signed into law SB 358 to strengthen California’s Equal Pay Act to require equal pay for “substantially similar” work and last year, Governor Brown signed AB 1676, which mandated that salary history alone could not be used to justify pay inequalities.
AB 168 aims to narrow the gender gap by preventing employers from making offers of employment based on an applicant’s salary history. In doing so, AB 168 seeks to end the perpetuation of gender-based discrimination in the workplace. AB 168 also intends to eradicate any perceived gap in negotiating power between an employer and employee who must disclose his/her salary history.
AB 168 In Practice
AB 168 will prohibit employers from inquiring into the salary history information of an applicant in determining whether to offer an applicant employment or what salary to offer that prospective applicant. AB 168 specifies that “salary history information” includes compensation and benefits.
AB 168 also prohibits an employer from considering or relying on salary history information in making a salary determination. However, AB 168 does not preclude a prospective applicant from “voluntarily and without prompting” disclosing his/her salary history. In such circumstances, the employer may consider that information in making a determination of salary for that particular applicant.
Additionally, AB 168 requires employers, upon reasonable request, to provide pay scale information to a prospective applicant. In other words, if a prospective applicant inquires as to the compensation for a specific position, the employer is required to provide that prospective applicant with a pay scale.
Notably, AB 168 adds Section 432.3 to the California Labor Code. This section will apply to state and local government employers; however, AB 168 will not apply to the salary history information disclosable to the public pursuant to federal or state law.
What Should Employers Do Now
AB 168 will go into effect on January 1, 2018. Before then, employers should review their employment policies, including employment applications, to ensure that they do not inquire into, or rely upon, salary history information. Additionally, hiring processes should be reviewed to confirm that all employees involved in hiring understand the impermissibility of salary history inquiries in light of AB 168.
To read more on this topic, please visit our blog: California’s Employment Law Class of 2017: The Summarized Laws and Recommendations for Compliance.
Client Alert 2017-258
