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2019 Relief for Employers on Salary History Ban

Published Wednesday, September 26, 2018
by Kim Gusman, President & CEO

One of the most difficult employment law changes for California employers in 2018 was Labor Code section 432.3 which prohibits employers from asking job applicants for salary history information and requires them to provide applicants with the pay scale for a position upon reasonable request.

Good news is on the way! Effective January 1, 2019, Labor Code (LC) sections 1197.5 and 432.3 are clarified and amended in a few key ways:

1. The law defines “applicant,” “pay scale,” and “reasonable request” – these terms were previously undefined in LC section 432.3.
    a. “Applicant” is defined as an individual who seeks employment with the employer, not a current employee.
    b. “Pay scale” means the salary or hourly wage range, and it does not include bonuses.
    c. “Reasonable request” means a request made after the applicant has completed the initial interview.
2. Employers may now inquire about salary expectations! This is huge. While employers are still not permitted to ask for an applicant’s salary history information, they may ask for an applicant’s salary expectations.
3. The law will permit employers to use an existing employee’s current salary as one factor in making future pay decisions. A wage differential is justified by a seniority system, merit system, or a system that measures earnings by quantity or quality of production, or a bona fide factor other than race or ethnicity, such as education, training, or experience, as listed in LC section 1197.5.

 


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