On October 12, 2017, Governor Brown signed a new law which expands California’s fair pay laws in front of the Women’s Empowerment Group in Sacramento, California. Specifically, AB 168 added Labor Code 432.2 which generally requires all employers, of any size, to adhere to these new rules:

• Cannot ask for prior salary information. An employer shall not, orally or in writing, ask for or seek salary history information, including compensation and benefits, about an applicant for employment.

• Cannot use prior salary information to set wage rates for applicants. 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.

• Must provide pay scale for position. Upon request, an employer shall provide the pay scale for a position to an applicant applying for employment.

• The new law does not apply to salary history information disclosable to the public pursuant to federal or state law.

There are also some other unique provisions. The new law does not prohibit an applicant from voluntarily disclosing salary history information to a prospective employer. If an applicant voluntarily and, without prompting, discloses salary history information to a prospective employer, the law does not prohibit that employer from considering the voluntarily disclosed salary history information. However, the new law does remind employers that, even with voluntary disclosure by an applicant, the employer must still be mindful of Labor Code 1197.5. This section was amended last year to clarify the prior salary history, by itself, cannot be used to justify any disparity in compensation.

This new law will have a significant practical impact for employers. Employers will likely need to move to update employment applications to remove questions regarding prior salary history or wage rates. Individuals who conduct hiring interviews of applicants should be trained on the new law. Employers should consider establishing pay grades for each position based on lawful, non-discriminatory factors and be prepared to respond to applicants who request the pay scale for a position. California continues to be on the forefront of fair pay legislation.