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CA clarifies its prior ban on employers' inquiries into salary history

In 2017, the California legislature passed Assembly Bill 168 (AB 168) adding Section 432.3 to the Labor Code. AB 168 imposed various restrictions on employers with respect to applicants, including prohibiting employers from seeking salary history information about an applicant for employment. It also prohibited employers from using that information as a factor in determining whether to offer an applicant employment, and in determining what salary to offer an applicant. (AB 168 did not prohibit applicants from voluntarily disclosing salary history information.) Further, AB 168 required employers, upon reasonable request, to provide the pay scale for a position to an applicant.

Unfortunately, AB168 contained some unclear language and undefined terms that left many employers confused. To clarify the language, in 2018 the legislature drafted a follow-up Assembly Bill 2282 (AB 2282) amending Labor Code section 432.3. Specifically, AB 2282 defines the following terms: 1) "pay scale" as a "salary or hourly wage range;" 2) "reasonable request" as a "request after an applicant has completed an initial interview with the employer;" and 3) "applicant" as "an individual who is seeking employment with the employer and is not currently employed with that that employer in any capacity or position."

AB 2282 also added a subsection (i) to Section 432.3 specifying that the law does not prohibit an employer from asking an applicant about their salary expectation for the position.

Finally, AB 2282 also amended Labor Code section 1197.5 language regarding disparity in compensation, stating that prior salary history "shall not justify any disparity in compensation." So, while an employer can take a current employee's existing salary into consideration to justify a wage differential, it must also be based on one of the following factors: seniority, merit, quantity or quality of production, education, training, experience, etc.

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