How do you determine what to pay new hires? While some employers have set wages for certain positions, starting salaries are often negotiable. To gauge what salary applicants may be expecting, some employers include questions about past salaries on job applications. Starting January 1, this practice will be illegal in California.
Under AB 168, which Gov. Jerry Brown signed into law in October, employers will no longer be permitted to:
- Ask applicants for information about past salaries, either verbally or in writing, or have a recruiter or other agent seek this information about applicants
- Use an applicant’s salary history to determine whether to offer that person a job
- Use an applicant’s salary history to determine that person’s starting salary
The law will apply to employers of all sizes in the private and public sectors. Employers will also be required to provide applicants with pay scale information for the position upon request, so you should prepare this information before beginning the hiring process.
What if an applicant volunteers information about past salaries?
The law specifies that applicants may still volunteer information about their past salary. However, employers may never use past salary information, by itself, to justify wage disparities between employees. Also, as noted above an employer may not use the voluntarily disclosed information to determine starting salary or to determine whether or not to offer employment.
Indeed, the ban on salary inquires is intended to help reduce wage disparities – and the gender pay gap in particular. Several other states across the country have enacted similar laws, including Oregon, Massachusetts and Delaware. The city of San Francisco established its own ban on salary inquiries earlier this year.