California Attempts to Clarify Salary History Ban

​On July 18, California Gov. Jerry Brown signed new legislation (A.B. 2282) to clarify the state's law that prohibits inquiries into an applicant's salary history.

When A.B. 168 was signed into law in October 2017, California prohibited employers from asking job applicants for "salary history information." Under this legislation, California employers must provide "applicants" with the "pay scale" for a position upon "reasonable request." The law was rather unclear, however, about what each of these three terms meant.

For example, under A.B. 168, it was not clear whether the term "applicant" meant only external applicants for a position or also current employees applying for the position. A.B. 2282 clarifies that an applicant is an individual who seeks employment with the employer, not a current employee.

Next, it was not clear what information an employer would have to supply when a reasonable request was made for the "pay scale" of a position. A.B. 2282 defines pay scale as a salary or hourly wage range and clarifies that the definition of pay scale does not include bonuses or equity ranges.

A.B. 2282 also clarifies what constitutes a "reasonable request" for pay scale information. A reasonable request is defined as a request made after the applicant has completed the initial interview.

Additionally, A.B. 2282 clarifies that although A.B. 168 prohibits employers from asking for the applicant's salary history information, employers may ask about an applicant's salary expectations for the position.

The new legislation addresses aspects of the California Equal Pay Act as well. It was unclear under what circumstances an employer could use prior salary to justify a disparity in pay. The new legislation attempts to clarify this: "Prior salary shall not justify any disparity in compensation. Nothing in this section shall be interpreted to mean that an employer may not make a compensation decision based on a current employee's existing salary, so long as any wage differential resulting from that compensation decision is justified by one or more of the factors listed in this subdivision."

Those factors are (1) a seniority system, (2) a merit system, (3) a system that measures earnings by quantity or quality of production, and (4) a bona fide factor other than race or ethnicity, such as education, training or experience.

Jeffrey Wortman is a partner and Christopher Im is an associate in the Los Angeles office of Seyfarth Shaw. Copyright © 2018 Seyfarth Shaw. All rights reserved.