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Paul Zimmerman

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Salary Inquiries Becoming A Thing Of The Past

Attention employers in California, you are the latest to be prohibited from asking questions about a job applicant’s compensation history, a move designed to close the gender pay gap.

The Parity in Pay Ordinance, which takes effect next year (July 2018), was the first bit of legislation passed in the state to address the issue. Pursuant to that law, employers in San Francisco will be banned from seeking such information during the hiring process. Indeed, under the ordinance – which defines employers to include job placement and employment agencies (e.g., recruiters and executive search firms) acting on behalf of their company clients – salary history cannot be considered or relied upon by an employer in determining whether to extend a job offer or in formulating its terms. That being said, if a prospective employee voluntarily discloses his or her salary history without prompting, an employer may take steps to confirm the information and use it when making hiring decisions.

The entire state now follows suit given the passage of Assembly Bill 168, recently signed into law by Governor Edmund G. Brown Jr. Effective January 1, 2018, all California employers, public and private, are prohibited from inquiring – either directly or through an agent – about a job applicant’s compensation and benefits history. Likewise, such salary information cannot be relied upon by any given employer in determining whether to extend a job offer to an applicant or the amount the applicant should be paid. However, like San Francisco’s version of the law, AB 168 will allow employers to consider salary history if voluntarily disclosed. In addition, employers will be required to provide pay scale information when requested by job applicants.

No doubt, employers like having prior salary information because it can inform decision-making, possibly avoiding candidates who are too “expensive.” It also assists in the development of a compensation package as part of any given offer. Nevertheless, California (and San Francisco) join Philadelphia and New York City as well as the states of Massachusetts, Oregon and Delaware in banning employers from raising the topic during the hiring stage – again, all in an effort to tackle pay inequality. Of note, women in San Francisco generally earn just 85% of what men are paid, and minority women even less than that.

In response to this trend disallowing salary inquiries, employers doing business in any of the foregoing locales should make certain that their applicant screening and hiring protocols are compliant.

This blog post is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.