A new California law says you can’t ask, but it doesn’t say job applicants can’t tell.
Beginning in January, California employers are prohibited from asking applicants what they made in the past and using that information to determine a salary offer.
Sponsored by Assemblywoman Susan Eggman, D-Stockton, Assembly Bill 168 passed the state California State Legislature last year and was signed into law by Gov. Jerry Brown.
The law is an attempt to close a wage gap that leaves women often earning substantially less than men. According to the U.S. Census Bureau, women made 80.5 cents for every $1 men made in the U.S. in 2016 — the most recent year for available data.
The concept behind Eggman’s “salary privacy bill” is that job applicants who are forced to reveal their past salaries may see wage disparities continue into their new jobs.
Opponents of the bill, including many companies and professional associations such as the Western States Trucking Association, unsuccessfully argued that prohibiting employers from asking about salaries hinders recruiting of qualified employees. Without knowing where to begin in the salary negotiations, employers are unable to determine if a proposed pay is a reasonable offer or an insulting, “lowball” figure.
Under the new California law:
- Employers may not ask a job applicant, or otherwise seek information, about an applicant’s salary history, including compensation and benefits.
- Post-job offer, an employer may contact an applicant’s previous employer to verify past salary.
- Employers must provide an applicant with a pay scale for a position upon a reasonable request.
Employers should be prepared to disclose company-approved pay ranges for a position and explain that actual pay is dependent on such factors as experience and qualifications. In this new “salary privacy” environment, employers may wish to include salary ranges in recruiting ads.
Although the law does not prohibit applicants from voluntarily disclosing salary histories, employers may not rely solely upon this information to determine an employment or compensation offer. Document an applicant’s willingness to disclose past salary information.
Despite these prohibitions, the new law does not leave employers completely in the dark. There are ways for employers to obtain information that will help structure appropriate and competitive salary offers. Employers may still ask applicants about their salary expectations for the new position. They may also ask if an applicant has a concern about losing a particular benefit in a transition to a new job.
There should be little mystery around what an applicant would consider a competitive salary offer. For both employers and applicants, online job websites such as Glassdoor.com offer gold mines of pay scale information listed by city, county or region.
As with any new law, compliance will be the biggest challenge for employers. Some compliance tips include:
- Train hiring staff on the new laws.
- Remove salary questions from job applications.
- Remove salary questions from reference-checking procedures.
- Document the changes made to company procedures to comply with the new law. Also document the nature and responses to questions during the interview process.
The new law applies to recruiters as well. Be cautious when using an outside recruiter. Review a recruiter’s procedures. Enter into a written agreement requiring compliance with the new law. Consider obtaining indemnification from any acts taken by external recruiters that may violate the new law.
