Good News Employers – There are Now Some Answers to Your Questions About the Recent Law Prohibiting Use of Prior Salary History
July 27 2018
On July 18, 2018, Governor Brown signed Assembly Bill (AB) 2282 which provides answers and clarifications to a number of questions employers had about the new law that went into effect in January 2018 (Assembly Bill 168 – codified in Labor Code section 432.3). Section 432.3 prohibits employers from relying on the salary history information of an applicant for employment as a factor in determining whether to offer an applicant employment or what salary to offer an applicant, and also requires an employer, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment.
Since its enactment, employers were questioning the scope of the restrictions contained in Section 432.3, and their obligations in connection with disclosing pay scale information upon request. In order to answer some of those questions, AB 2282 does the following:
1. It clarifies that the prohibitions under Section 432.3 do not apply when evaluating the salary of a current employee (e.g. if internal applications or employee promotions are being considered). Specifically, AB 2282 provides that: “For purposes of this section, the term “applicant” or “applicant for employment” means an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.”
2. In connection with an applicant’s right to seek the pay scale for a position upon reasonable request, AB 2282 defines the two terms as follows:
– “For purposes of this section, “pay scale” means a salary or hourly wage range.”
– “For purposes of this section “reasonable request” means a request made after an applicant has completed an initial interview with the employer.”
Based on these definitions, employers now only have to provide a range of what the salary or hourly wage would be for a position rather than some fixed or guaranteed pay scale. Further, employers only have to provide this information to an applicant once he or she has completed an initial interview with the employer.
3. Finally, Section 432.3 already provides that nothing in the section prohibits an applicant from voluntarily and without prompting disclosing salary history information to a prospective employer. However, the law was silent on whether an employer could ask an applicant about his or her salary expectations.
AB 2282 clarified that the law does not prohibit an employer from asking an applicant for his or her salary expectations. Specifically, AB 2282 states: “Nothing in this section shall prohibit an employer from asking an applicant about his or her salary expectation for the position being applied for.”
Takeaway: While AB 2282 provided some much needed clarification to the new law, employers must still be sure that anyone involved in the hiring process is aware of the restrictions contained in Section 432.3 in connection with an applicant’s prior salary history. The employment attorneys at Weintraub Tobin regularly counsel employers in all areas of employment law compliance, including wage and hour and equal pay issues. Feel free to contact us if we can be of assistance.