California’s Ban Clarified On Applicant Salary History

Intended to eliminate traditional disparities in pay levels for the same or similar work, new California Labor Code section 432.3 prohibits employers from seeking an applicant’s salary history. See, What’s New 2018 – Salary History (December 2017). On the other hand, such employers must disclose a job position’s “pay scale” upon the applicant’s “reasonable request.”

To resolve certain ambiguities in this statute, the state has enacted so-called clean-up legislation (the Amendments), effective January 1, 2019. This includes several new definitions:

• Pay scale “means a salary or hourly wage range” for the job position.

• Reasonable request for the pay scale “means a request made after an applicant has completed an initial interview with the employer.”

• Applicant “means an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.”

The Amendments also clarify that employers may ask an applicant about his or her salary expectations for the position being applied for.

In addition, the Amendments confirm that although an applicant’s salary history shall never justify any pay disparity, the rules are slightly different regarding current employees. Employers may base compensation decisions on their current employees’ existing salary, so long as the employer can justify any pay disparity of employees of a different gender, race or ethnicity who perform substantially similar work. Valid wage differentials are limited to a seniority system; a merit system; a system that measures earnings by quantity or quality of production; and/or a bona fide factor such as education, training or experience. See, Labor Code section 1197.5, California Fair Pay Act.

For further assistance, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth

August 21, 2018