AB 168: California prohibits applicant salary inquiries

California continued its expansion of pay equity protections on Oct. 12, 2017, when Gov. Jerry Brown signed into law a statewide ban on employer inquiries into applicant salary history information. Assembly Bill 168, codified at Labor Code Section 482.3, took effect on Jan. 1, 2018, and prohibits California employers from asking -- directly or indirectly -- about a candidate's prior salary history information, which includes both the individual's rate of pay as well as other benefits. This means an employer can no longer ask a job applicant directly, nor can it ask the candidate's prior employer, for this information. The new law also prohibits California employers from relying on an applicant's prior salary history "as a factor in determining whether to offer employment ... or what salary to offer an applicant," and requires the employer, upon reasonable request, to provide the candidate with the pay scale assigned to the position sought.

There are a few exceptions to these new salary history restrictions. For example, employers may review and consider salary history information that is publicly available pursuant to federal or state law. Also, an applicant may "voluntarily and without prompting" disclose his or her salary history information to a potential employer. In that case, the employer may consider and rely on that information in setting the applicant's salary. Employers should be mindful, however, that this new legislation comes on the heels of 2016's fair pay legislation, AB 1676, which prohibits prior salary history from being the sole justification for a pay disparity. Thus, even where consideration of salary history is permissible, prior salary cannot, by itself, justify a pay disparity between workers of the opposite sex who are performing substantially similar work.

The enactment of Labor Code Section 432.3 adds California to the growing list of jurisdictions that prohibit inquiries into the salary history of job applicants. In recent years, New York City, Delaware, Puerto Rico, Oregon and Massachusetts all have passed similar legislation and a comparable ordinance will become effective on July 1, 2018, in San Francisco. Given this trend, employers may wish to revisit their employment applications to remove requests for prior salary information and to educate those conducting interviews about permissible pay inquiries and how to respond to requests for pay scale information.