California Legislature Clarifies Applicant Salary History Question Rules

This summer, Governor Jerry Brown signed Assembly Bill 2282, which resolves ambiguities created by prior pay equity legislation AB 1676 (2016) and AB 168 (2017).  As you may recall, AB 168 prohibits questions on applications and during interviews regarding salary history.  The law also requires employers to provide a pay scale upon demand by applicants.     

AB 2282 clarifies that Labor Code section 432.3 does not prohibit an employer from asking an applicant for employment about his or her “salary expectation” for the position being applied for.  The bill also defines several terms from Labor Code Section 432.3.  AB 2282 provides that “pay scale” means a “salary or hourly wage range,” that “reasonable request” by an employee for a position’s pay scale means “a request made after an applicant has completed an initial interview with the employer,” and that “applicant” or “applicant for employment” means “an individual who is seeking employment with the employer and is currently not employed with that employer in any capacity or position.”

AB 2282 provides that prior salary cannot be used to justify a wage differential, whether used on its own or in combination with a lawful factor under Labor Code section 1197.5.  However, the bill clarifies that an employer is authorized to make a compensation decision based on an employee’s current salary as long as any wage differential resulting from that compensation decision is justified by one or more of the factors specified in the statute.  This provides a limited carve out for using prior salary in a compensation decision in the case of a current employee (for purposes of giving employee raises or bonuses, for example).

What This Means For Employers
AB 2282 allows employers more flexibility in applicant interviews.  While employers are still prohibited from asking how much an applicant currently earns or how much they earned in prior jobs, employers may discuss how much a job candidate expects in pay for a particular job.  AB 2282 also limits who can request pay scales to those who have interviewed with the Company.  Finally, AB 2282 clarifies that the rule regarding salary history questions applies to applicants who are not employees of the company, and not internal candidates seeking a promotion.  For questions concerning the application or interview process, you may contact the author or your usual employment and labor counsel at AALRR

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