WORKPLACE LAW LOWDOWN | California Will Bar Employers From Requesting Applicant Salary History
Many employers inquire about an applicant’s prior compensation history to determine an appropriate salary offer.
This practice has long given employers an advantage in salary negotiations, particularly with less sophisticated job applicants. Employers will no longer have this advantage in California. The governor of California recently signed a law that will prohibit employers, including their agents, from soliciting or trying to solicit the salary history of an applicant.
The new California law, which goes into effect on January 1, 2018, applies to all employers, regardless of size, including state and local governments. It bars an employer from asking for information about an applicant’s past salary or benefits. This means employers will no longer be able to use an applicant’s salary or benefit history in deciding whether to offer an applicant employment. If an employer makes an offer of employment, an applicant’s salary history cannot be used in determining what salary to offer. However, if an applicant voluntarily discloses his or her salary history, the employer may consider and rely on that information to determine what salary to offer that applicant.
Significantly, employers must, upon request from an applicant, provide a pay scale for the position for which the applicant is applying. This change will require an employer to determine the value of the position an applicant is applying for in advance, without regard to the applicant’s past salary. In effect, some bargaining power will shift to the applicant because the employer will have to provide a salary range for the position without knowing the applicant’s expectations or current salary.
California joins Delaware (H.B. 1), Massachusetts (Bill S. 2119), and Oregon (Equal Pay Act), which have passed similar laws that are in effect, or will go into effect in the future. While it is currently legal in Michigan for an employer to ask for an applicant’s salary history, and rely on that information when making a salary or employment offer, these recent changes may signal an impending shift in this area of the law. Particularly for employers operating in multiple states, it is always best to consult with an attorney to ensure compliance with changing laws regarding the use of applicant salary history.