Updated 9.28.18

Under California Labor Code Section 432.3 that went into effect on January 1, 2018, you know you can’t ask job applicants about their salary history. However, there are all sorts of questions that come up about this.

Let’s dive into the CA salary questions that need answering.

Q: What’s up with AB 2282, which came out in July 2018?

A: California’s salary history ban was amended under AB 2282 in an attempt to clarify things for employers.

Highlights

• An applicant is defined as an individual seeking employment with an employer and is not considered a current employee.
• If applicants request a “pay scale” for a position, employers need to provide a salary or hourly wage range. The pay scale doesn’t have to include bonuses or equity ranges.
• Applicants can make a “reasonable request” for a pay scale after he/she completed an initial interview.
• Even though employers can’t ask applicants for salary history information, employers can ask applicants what their salary expectations are for a position.
• Employers may only use one of these factors to justify a disparity in pay: 1) a seniority system, 2) a merit system, 3) a system that measures earnings by quantity or quality of production, or 4) a bona fide factor other than race or ethnicity, such as education, training, or experience.
• Basing a pay disparity on someone’s prior salary isn’t allowed.

Q: If we have a recruiter determine an applicant’s salary history, is that OK?

A: No. The law forbids both employers and their agents from seeking an applicant’s salary history. Since your organization can be held liable for your recruiters’ actions, verify that they revised their processes and are no longer asking applicants for salary information.

Q: What if applicants volunteer salary history information?

A: If applicants voluntarily disclose their salary information/past earnings, then the law allows employers to use that information. However, you can’t use prior salary as your only criteria for justifying a pay disparity. (See the first question above.) A best practice is to document the disclosure and ensure you have additional ways to determine a new hire’s salary.

Q: As part of the recruiting and hiring process, can employers ask applicants about their past benefits packages?

A: No, this is protected information. Salary history information includes compensation and benefits, and employers can’t ask applicants about the value of their benefits. For now, you can ask if there are benefits that a candidate may be giving up by coming to work for you and if that would be a barrier to them.

Q: After the job offer is issued, can employers verify a person’s salary history?

A: Yes, in most cases, you can contact a previous employer once you’ve made a formal job offer to verify your candidate’s prior salary. However, in San Francisco, employers cannot disclose the salary history of any current or former employee without written permission from the employee.

Q: At what point do employers need to disclose the salary range for a position?

A: When an applicant makes a “reasonable request” to learn about a position’s pay scale, employers must be prepared to provide it. An applicant can request a pay scale after they complete an initial job interview. Track when applicants requested the information and how their requests were satisfied.

Despite not being required to disclose salary information unless applicants ask for it, you may want to proactively list it in your recruiting materials. You can provide the salary range for a position and qualify that it is dependent on qualifications and experience. This helps applicants determine if the position is appropriate for them.

As always, clients with KPA’s Ask the HR Expert service can call or email us with questions on state and federal employment regulations.