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Should You Ask Job Applicants About Salary History?

Seven months ago, Governor Brown vetoed a bill (AB 1017) that would have prohibited California employers from asking applicants about their salary history. Now a new bill that contains some of the same language, AB 1676, is before the legislature. Under both AB 1676 and its predecessor:

An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including, but not limited to, compensation and benefits, about an applicant for employment.

The new bill hasn’t made it very far and there’s no reason to believe it will fare better than AB 1017. But even if it doesn’t pass, should employers ask applicants about their prior earnings? I can think of three good reasons not to.

First, under California’s Fair Pay Act, salary history is not a proper justification for a pay disparity. So you can’t use that as a basis for paying one worker more than a co-worker who is performing “substantially similar” work. It’s easier to argue that you didn’t rely on this impermissible factor if you didn’t seek out the information.

Second, there seems to be growing sentiment that the question is improper and overly intrusive.

Third, if you’re looking to fill a position, you should have some idea what people in that position make and what the value is to your organization. If you genuinely have no idea, maybe the benefits of asking the question outweigh the risks. But in most situations, asking for information that you’re prohibited by law from relying on is a bad idea.

Of course, if the legislature passes the measure prohibiting salary history inquiries, the issue will be moot.

Here’s another fun aspect of AB 1676. It says that: “an employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.”

I’ve never heard of such a requirement before. Even if you make applicants sign nondisclosure agreements, isn’t it just a matter of time before your competitors know what you’re paying your workers? While we may get into this in more detail in a later post, I’ll say now that I think it’s a very bad idea. I also think the legislature knows that, since they’ve had the foresight to specifically exempt themselves from that requirement.

BY JEFFREY D. POLSKY ON MAY 17, 2016