Governor Brown signed AB 168 into law on October 12, 2017, in response to concerns that the use of salary history information in the hiring process can perpetuate prior discrimination and suppress wages of women. The legislation adds new Labor Code Section 432.3 to California law, effective January 1, 2018. It prohibits all employers from seeking and relying on salary history information in the recruiting, hiring, and wage setting processes. Notably, the bill adds a new provision to the Labor Code and does not amend the Fair Employment and Housing Act (“FEHA”).

1. General Features Of AB 168

Specifically, it prohibits employers from the following:

(a) Relying on the salary history information of a job applicant as a factor in determining whether to offer employment to the applicant or what salary to offer.

(b) Seeking salary history information, including compensation and benefits, about a job applicant, either orally or in writing, personally or through an agent. It also requires employers to provide the pay scale for a position to a job applicant upon reasonable request.

2. Coverage

The bill will apply to all employers, including state and local government employers and the Legislature. However, it does not apply to salary history information disclosable to the public pursuant to federal or state law. The bill expressly provides that a violation of its provisions would not constitute a misdemeanor.

3. Voluntary Disclosures

The bill states that it does not prohibit an applicant from voluntarily and without prompting disclosing salary history information to a prospective employer. Furthermore, if such a voluntary disclosure occurs, the bill does not prohibit the employer from considering or relying on that voluntarily disclosed salary history information in determining the salary for that applicant.

4. Reliance On Prior Salary

The bill reiterates the provisions in Labor Code Section 1197.5. It notes that nothing in the legislation should be construed to allow prior salary, by itself, to justify any disparity in compensation.

5. The San Francisco Ordinance

It bears noting that San Francisco has adopted an ordinance that is similar. However, the San Francisco ordinance is two-sided. First, it prohibits employers from seeking or using salary history information. Second, it prohibits employers in the city from releasing salary information regarding a current or former employee without the individual’s consent.

To read more articles like this one, subscribe to the ALERT Newsletter today!