On October 12, California Governor Jerry Brown signed several bills he believes will “make a positive difference for women, children and families across the state.” One of those bills is AB 168, which beginning in 2018 will forbid all employers of any size in the state, including local and state governmental units, from asking job applicants for their salary and benefit histories, either in writing or orally.
The law is aimed at helping to prevent wage inequality between people based on gender or race. Some other states, New York City and the city of San Francisco already have similar laws on the books, according to The National Law Review.
Assemblymember Susan Eggman, D-Stockton, who sponsored the bill, views it as a step toward women being “confident that their pay will be based on their abilities and not their gender.”
An employer also may not try to get salary information through the request of an “agent,” presumably referring to a recruiter or employment agency representing an employer.
The other prong of the law is that an employer may not use salary history as a factor in the decision whether to offer someone a job or for use in setting the person’s salary level.
An exception is made if the job applicant “voluntarily and without prompting” shares his or her salary history. If an applicant discloses salary history in this way, the employer can use it as a factor in setting the salary for the person, if hired.
The law, however, states that it should not be interpreted “to allow prior salary, by itself, to justify any disparity in compensation.”
The provision also requires an employer to provide its “pay scale” for the position in question in response to a “reasonable request.”
Current equal pay law
The bill adds teeth to existing California state law called the Equal Pay Act, which already forbids salary differences between people of different genders, or of different races or ethnicities, for “substantially similar work,” unless the gap can be justified based on legitimate factors not related to gender or race. Prior salary may not be the only grounds to support pay gaps based on the protected characteristics.
Reasons that could legitimately justify different salaries between those of different genders, races or ethnicities could include seniority, productivity, education, experience, training or merit, for example.
Administrative and lawsuit remedies are available for Equal Pay Act violations.
Employers should get legal guidance now
Since the law will take effect soon on January 1, now is the time for California employers to seek guidance from their lawyers about exactly what the law requires and how to implement hiring practices that will be in compliance. Any small- or medium-sized business owner or sole proprietor unlikely to have an attorney in house on staff should consult an employment lawyer for this important assistance.