Amendments clarify employer restrictions on requesting salary history of applicants

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As we reported in our 2018 New Laws article, California Labor Code 432.3 imposed a new prohibition against an employer seeking or considering salary history (including compensation and benefits) of an applicant for employment. However, the new law, as originally drafted, left some ambiguities. Now, the Governor has signed AB 2282 into law, which clarifies the following ambiguities in Section 432.3.

  • Upon its enactment, Section 432.3(a) has stated: “An employer shall not rely on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.” AB 2282 now clarifies that “applicant” or “applicant for employment” means an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position. Therefore, a current employee who is applying for different position with the employer, such as a transfer or promotion, is not treated as an applicant for purposes of Section 432.3.
  • Under Section 432.3(c), an employer is required to provide the “pay scale” for a position to an applicant applying for employment, upon “reasonable request.” AB 2282 states that, for purposes of this section, “pay scale” means a salary or hourly wage range, and that “reasonable request” means a request made after an applicant has completed an initial interview with the employer. This pay scale information may not be as easy to provide for commission and other production-based positions , where potential pay ranges may be broad in scope depending on performance, market conditions and other variables, and it is still not clear whether an employer provides enough pay scale information by stating a commission percentage or piece-rate hour figure.
  • From the time of their original enactment, Sections 432.3(g) and (h) have allowed a prospective employer to consider and act on salary information that the applicant discloses “voluntarily and without prompting.” Now, AB 2282 also specifies that employers may ask an applicant about their salary expectation for the position being applied for. Employers who want to take advantage of this allowance in the law and request an applicant’s salary expectations should be careful to not allow the dialogue to divert into a salary history inquiry. For example, if an applicant discloses a specific salary expectation, the employer should avoid follow-up questions such as: “Is that the salary you are accustomed to?” or “Would that be a raise for you?”

Although AB 2822 does not resolve all ambiguities in Labor Code Section 432.3, it does clarify some allowable Employer conduct. As such, employers should ensure that all personnel involved in the interviewing process are trained on the Labor Code Section 432.3 requirements and the AB 2282 clarifications thereto. Also, employers should double-check that their application forms and any other pre-hire documentation or inquiries are devoid of inquiries or elicitation of prior pay information.