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California Clarifies Salary History Ban Legislation

09/01/18

Author: ADP Admin/Thursday, August 30, 2018/Categories: State Compliance Update, California

Overview: Since the salary history ban’s enactment in January 2018, California employers have struggled to understand the restrictions it imposes. Assembly Bill 2282 clarifies the intended meaning of several key terms.

Effective Date: January 1, 2018

Details:
California Assembly Bill 168 (AB 168) prohibits employers from seeking the salary history of applicants for employment. Designed to eradicate the wage gap, AB 168 also requires employers to provide applicants, upon reasonable request, with the pay scale for the position.

Since the salary history ban’s enactment in January 2018, California employers have struggled to understand the restrictions it imposes, as it fails to define key terms, such as “applicant,” “reasonable request” and “pay scale.” On July 18, 2018, Governor Jerry Brown signed into law Assembly Bill 2282 (AB 2282) to clarify the intended meaning of these terms.

AB 2282 defines “applicant” or “applicant for employment” as an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.

It defines “pay scale” as a salary or hourly range and provides that a “reasonable request” for such pay scale is a request made after an applicant has completed an initial interview.

AB 2282 additionally seeks to address the legality of an employer’s questions related to an applicant’s expected salary. Although several local ordinances adopting salary history bans permitted employers to inquire about such information, AB 168 was silent on the issue. AB 2282 expressly provides that employers are not prohibited from asking an applicant about his or her salary expectation for the position being applied for.

Finally, AB 2282 authorizes employers to consider a current employee’s existing salary when making a compensation decision, so long as any disparity resulting from that decision is justified by a seniority system, merit system or other bona fide factor unrelated to the employee’s sex, race or ethnicity.

Action Required: California employers should review their pay practices and policies. They should also train Human Resources professionals, supervisors and others involved in hiring and compensation decisions on California’s pay equity law.

Please be sure to contact your Human Resources Business Partner if you have any questions.

This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.

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