17
Oct

Don’t Ask About Politics, Religion, And Now, Salary History

Beginning January 1, 2018, employers cannot ask job candidates how much they made at previous jobs as they determine whether to extend an offer of employment and how much to pay them.

There are many reasons for the gender pay gap—the fact women on average earn just 83% of what men earn in the same job--but one is the tendency for employers to use a job candidate’s previous salary as a benchmark in deciding what to pay them in a new position. After grappling with the issue for several years, California joins several other states in banning an employer from asking how much applicants earn. Employers must now follow the California Fair Pay Act, which goes into effect Jan. 1, 2018.

When searching for candidates, some companies and recruiters ask early in the hiring process what prospects hope to earn or what their salary range is, rather than sharing the salary range the company believes the position merits. This holds true for hourly as well as salaried positions. Logically, employers have the upper hand here, and a more thorough understanding of current salary data and trends. The new law, which affects public and private employers, aims to level that playing field, for both men and women.

In addition to banning discussions of salary history with job candidates, employers will be forbidden from seeking that information from previous employers, managers or other third parties. The law does allow employers to consider salary information that is public, such as government salaries over a certain figure that are disclosed pursuant to California’s Public Records Act, though caution is called for even in those instances.

Additionally, the new law requires employers to share the salary range it has for a position when a job candidate makes a “reasonable” request for it. What is reasonable remains to be seen - it will take a while for government agencies and the courts to provide that kind of guidance. In the meantime, it makes sense for employers to share the information whenever it is requested. Do not hold your ground and end up as the test case for California courts.

The law prohibits employers from taking salary history into consideration even if job candidates voluntarily disclose the information. It will be hard to prove that in a job interview situation, where prospects may be nervous and employers clearly have the advantage, that any disclosure regarding salary history was truly voluntary.

While employers wait for more detailed guidance, it is prudent to instruct hiring managers to err on the safe side and follow the new law to the letter. Employers should use the coming month to educate HR and hiring managers exactly what is allowed.