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Don’t Ask About Employee Salaries

Beginning January 1, 2018, employers cannot ask about employee salaries. Governor Brown signed AB-168, prohibiting employers from asking applicants about their prior compensation. Over the last few years, California strengthened its gender and racial equality laws. Part of that shift includes forces employers away from compensation history as a basis for determining current pay.

New Rules for Employee Salaries

Under newly enacted Labor Code 432.3:

  • Employers cannot rely on past employee salaries to determine eligibility for employment or what salary to offer.
  • Employers cannot directly or indirectly “seek salary history information, including compensation and benefits, about an applicant for employment.”
  • If asked, employers must provide the pay scale for a position to an applicant applying for employment.

The law applies to “all employers, including state and local government employers and the Legislature.” Employees are free to disclose their past salary information. If an applicant “voluntarily and without prompting discloses” salary history information to a prospective employer, the employer can consider the information in determining the salary for that applicant.

I suspect we will see some lawsuits around whether an applicant “voluntarily and without prompting” disclosed employee salaries or if an employer “silently coerced” the disclosure.

Employers can take some solace because a violation of the new employee salaries law is not misdemeanor like other similar provisions in the Labor Code.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

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