Effective January 1, 2018, new legislation enacted in California will prohibit employers from:

  1. Seeking past salary information, including compensation and benefits, about a job applicant; or,
  2. Relying on information regarding an applicant’s salary history as a factor in determining whether to offer an applicant employment or what salary to offer an applicant.1

In addition, if a job applicant makes a reasonable request, employers will be required to provide the pay scale for the related position to the applicant.

The legislation, which proponents contend seeks to target the gender pay gap, builds on a provision of the California Equal Pay Act which provides that an employee’s prior salary may not, by itself, be used to justify any wage differential between employees of the opposite sex performing substantially similar work, except under limited circumstances. Current law also bars employers from requiring employees to refrain from disclosing their rates of pay, and from discriminating against employees who do so.

This law will apply to all employers in California, including state and local government employers.

Employers should consult with experienced counsel and carefully review their hiring practices, pay structures, pay decision policies and procedures, and neutral job references policies to ensure compliance with this new law. Employers may also consider conducting a pay practices audit.