California just joined a growing number of states and municipalities prohibiting questions regarding wage history during the hiring process.
On October 12, 2017 California Governor Jerry Brown, signed in to law AB 168, prohibiting inquiries into pay history and use of pay history to inform hiring decisions.
This prohibition is similar to bans passed in San Francisco (Parity in Pay Ordinance), New York City (Introduction 1253-A), Philadelphia (Bill 160840) , Delaware (House Bill 1), Oregon (House Bill 2005) , Massachusetts (S.2119) , New York (Assembly Bill A2040C) and Puerto Rico (House Bill 453), that prohibit inquiries into prior salary, but is unique in several respects. First, California employers must now provide applicants with a pay scale for the position an applicant is seeking upon the applicant’s request. Second, the California law prohibits reliance of pay history to inform the hiring decision, meaning that even if the applicant voluntarily supplies this information, it cannot be used by the employer in deciding whether to hire that individual. An employer can, of course use that information to set the applicant’s pay (keeping in mind that the current California labor code already prohibits prior salary to justify current pay disparity). Third, the California law includes an exception for public salary history data that can be disclosed under freedom of information type laws.
Nuances from other jurisdictions include:
- The New York City law prohibits any type of searching of public records to obtain salary and benefits information and like San Francisco, also prohibits former employers from sharing pay and benefits information if a new potential employer inquires.
- The Delaware and Puerto Rico laws allow an employer to seek compensation and benefits history after an offer of employment has been accepted, but for the sole purpose of confirming the applicant’s compensation history.
- Oregon allows an inquiry into pay history only after making an offer with a specific rate of pay. It also has a rolling statute of limitations that resets with each pay check, but also provides an affirmative defense to employers who have conducted a wage audit and made attempts to eliminate wage differentials.
- Going a step further than Delaware, Oregon, and Puerto Rico, the New York state law only allows an employer to confirm wage history of a potential employee when that employee uses prior pay history to support his or her proposal for a higher rate of pay (and only after the employer has provided an offer of employment with specific compensation).
- The Philadelphia ordinance is hanging on by a thread – a federal district court dismissed a strong challenge to the ordinance from business interests in the city and the Pennsylvania senate passed a bill (SB 241) in February that would specifically allow inquiries into pay history and that would also preempt any local ordinances to the contrary.
- The Massachusetts law prohibits employers from prohibiting its own employees from discussing their own compensation, extends the statute of limitations to three years and, like the existing California Equal Pay Act, does not allow wage history as a defense to violations of the law. It does include an affirmative defense similar to Oregon’s noted above.
Employers in these jurisdictions should revisit their application documents and remove any questions about prior pay or benefits history, as well as references to minimum or maximum salary criteria for a particular position. In addition, employers should train interviewers to avoid this line of questioning and to know how to comply with the law while still negotiating salary and other benefits during the hiring process.