The Pay History Ban extends further, now all of California prohibits pay history questions

by Michael Haberman on October 18, 2017 · 0 comments


Pay equity is the driving force behind the ban on pay history questions.

Back in July of this year, I wrote The trend to ban salary history in the hiring process expands, where I explained that the ban on asking questions about salary history had extended from Massachusetts, New York City and Philadelphia to the city of San Francisco. This ban has since also been enacted in Delaware and Oregon. Now, effective January 1, 2018, the practice of asking an applicant about their salary history becomes illegal in the entire state of California. This is just one more step in the move toward pay equality.

What is included

According to Anthony Amendola and Justine Lazarus, of the firm Mitchell, Silberberg & Knupp, LLP, the law:

“… prohibits all California employers (including state and local government employers and the state Legislature) from:

  • Seeking from job applicants, whether “orally or in writing, personally or through an agent,” salary history information (including both pay and benefits); and
  • Relying on salary history as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.

Additionally, the law requires an employer to supply to an applicant, upon request, the pay scale for the position for which they are applying. The law does not require that employers have stated pay scales for positions, but if they do, they have to be able and willing to provide that information to applicants.

Two provisions

There are two provisions that “get around” this prohibition. First, if a candidate voluntarily reveals their salary history an employer is in the clear. Or if the information is contained within public records someplace, employers can have access to that information.

Problems

As I stated in my previous post, this will be more of an issue for smaller employers. I said:

“The underlying assumption in these laws is that every company has a defined pay structure that delineates a wage range for each job based upon identified compensable factors. With such a structure you can pay someone a salary or wage that fits into that structure and do so without knowing what the person made prior to working at your company. If your offer fits into the range and the employee is now willing to accept your offer you are good.

Unfortunately, in my experience most small and midsize companies do not have that compensation structure. They do not have defined wage ranges, rather they operate based on what the person made before as an indicator of what the market is paying, and then decide if they can pay that wage.”

This will continue to be a problem for small employers. They are going to have to expend time, effort, and money in developing pay ranges. Although the law does not require pay ranges be developed, it is not too far of a step to imagine an amendment or a court case that will require employers to develop stated pay ranges as part of transparency.

So be thinking about what your organization may have to do today to comply with the law. Even if you are not an employer with this is required you may still want to prepare. This trend will continue.


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