Advisory on Salary History Inquiries Featured in Practical Law

Thomson Reuters Practical Law

Thomson Reuters Practical Law recently featured an Act Now Advisory, “California’s Ban on Salary History Inquiries: New Law Brings Changes to the Job Application and Hiring Process,” authored by Jonathan M. Brenner, a Member of the Firm, and Rhea G. Mariano, an Associate, in the Employment, Labor & Workforce Management practice, in the firm’s Los Angeles office.

Following is an excerpt from the Advisory:

Many employers commonly ask applicants for their salary history as part of the job application process. Employers will also often rely upon an applicant’s salary history to determine or negotiate compensation for a job offer. However, the practice of relying on salary history has been called into question by policy analysts and equal pay advocates. The theory and concern is that such reliance perpetuates existing pay differences for women and minorities that historically have been underpaid relative to other groups.

To address this concern, on October 12, 2017, Governor Jerry Brown signed into law a new statewide salary privacy bill (A.B. 168), which adds section 432.5 to the California Labor Code and takes effect on January 1, 2018. The new law prohibits employers from asking for a job applicant’s salary history and from relying upon that history unless it is voluntarily provided. The enactment is part of a growing national trend to restrict or ban reliance on salary history in an effort to erase historical discriminatory pay discrepancies. California now joins a growing list of states, territories, and municipalities that have recently passed similar laws, including Delaware, Oregon, Puerto Rico, San Francisco, and, as we previously reported, Massachusetts, New York City, and Philadelphia. Many other proposed laws are pending across the country, including at the federal level with the “Pay Equity for All Act of 2017,” which was introduced in the House of Representatives on May 11, 2017.