Employers, it’s time to pull out the drafting pen and make an important change to your job application forms. Almost all job applications ask for basic information, including the applicant’s education and job history. Under job history, application forms usually seek the names of prior employers, positions held, dates of employment, and salary history. But starting January 1, 2018, it will be illegal in California to ask, directly or indirectly, for an applicant’s salary history. Care must be taken to remove the salary history information requests from the application- even if the applicant does not fill out the information, the employer has improperly required the prohibited information. Care must also be taken to warn hiring managers and other job interviewers to avoid inquiry on past salaries in efforts to determine a salary offer. Further, an employer, upon reasonable request, is required to provide an applicant with the pay scale for the position. California employers should be prepared.
Finally, while the drafting pen is out, employers should also remove any questions regarding criminal convictions on their job applications. This, too, has been prohibited.
The purpose behind this new law is to expand the equal pay protections of California’s pay equality mandates, including Labor Code Section 1197.5. Under section 1197.5, pay equality, on the basis of sex, race and ethnicity, is required for “substantially similar work, when viewed as a composite of skill, effort, and responsibility.” Use of salary history to set an employee’s wages is believed to perpetuate the pay gaps experienced by women and minorities, and therefore, has been banned. Further, although an employer may legally consider prior salary information disclosed voluntarily, without prompting, by an applicant in setting the compensation for that applicant, salary history alone may not justify any disparity in compensation; an employer still runs a risk of creating disparate pay for substantially similar work, and therefore, must tread carefully.
California employment rules are complex. Contact us if you need guidance in creating an equitable hiring and offer process, setting flexible and fair pay scales, drafting job descriptions, and/or updating your employment handbook or policies.