California’s Ban on Salary History Inquiries: New Law Brings Changes to the Job Application and Hiring Process

by Epstein Becker & Green
Contact

Epstein Becker & Green

Many employers commonly ask applicants for their salary history as part of the job application process. Employers will also often rely upon an applicant’s salary history to determine or negotiate compensation for a job offer. However, the practice of relying on salary history has been called into question by policy analysts and equal pay advocates. The theory and concern is that such reliance perpetuates existing pay differences for women and minorities that historically have been underpaid relative to other groups.

To address this concern, on October 12, 2017, Governor Jerry Brown signed into law a new statewide salary privacy bill (A.B. 168), which adds section 432.5 to the California Labor Code and takes effect on January 1, 2018. The new law prohibits employers from asking for a job applicant’s salary history and from relying upon that history unless it is voluntarily provided. The enactment is part of a growing national trend to restrict or ban reliance on salary history in an effort to erase historical discriminatory pay discrepancies. California now joins a growing list of states, territories, and municipalities that have recently passed similar laws, including Delaware, Oregon, Puerto Rico, San Francisco, and, as we previously reported, MassachusettsNew York City, and Philadelphia.[1] Many other proposed laws are pending across the country, including at the federal level with the “Pay Equity for All Act of 2017,” which was introduced in the House of Representatives on May 11, 2017.[2]

What the New Law Provides

Beginning on January 1, 2018, all private and public-sector California employers—including national and international companies operating in California with California employees—can no longer request an applicant’s “salary history information.” Salary history information includes both “compensation and benefits” (but is not defined further under the statute).

Under the new law, California employers MUST NOT:

  • rely upon a job applicant’s salary history information as a factor in determining whether to offer the applicant employment (unless such information is publicly disclosable);
  • rely upon a job applicant’s salary history information as a factor in determining the salary for the applicant (unless the information is voluntarily provided or subject to public disclosure by law); and
  • seek salary history information about an applicant, whether orally or in writing, or personally or through an agent.

In addition, California employers MUST, upon reasonable request, provide an applicant with a pay scale for the job position sought.

The new law does not define “reasonable request” or “pay scale.” Subject to further guidance from the California Legislature, administrative agencies, or the courts, it would appear for now that the statute leaves it to employers to determine the particulars of the “pay scale” for each job position that is subject to a request, be it a range, specific wage or salary level, compensation formula, or something else.

With respect to the term “seek,” although the new law does not define this term either, an employer should not (i) ask the applicant directly for his or her salary history information, (ii) include queries or places to fill in such information on job application forms, (iii) contact an applicant’s current or prior employer to inquire about compensation or benefits, (iv) request an applicant’s salary history through headhunters, or (v) conduct other searches for an applicant’s salary history information.

The new law provides that a violation will not constitute a misdemeanor under the applicable section of the California Labor Code, and it does not specifically provide for any penalty or other remedy for non-compliance. However, as the January 1, 2018, effective date draws closer, further guidance from the California Legislature and administrative agencies may be received as to the potential means of enforcement, including whether the new law will be interpreted to be covered by other statutes that impose penalties against employers for the violation of its provisions.

Exceptions

The new law includes exceptions for the following:

  • Voluntary Disclosure: An employer is not prohibited from receiving salary history information that the applicant voluntarily provides. If an applicant “voluntarily and without prompting” discloses his or her salary history information, the prospective employer may rely upon that information in determining the applicant’s compensation and other benefits. However, the employer may not consider that information in determining whether or not to hire the individual.
  • Salary History Information Available Under Federal or State Disclosure Laws: The new law states that it does not apply to salary history information that is disclosable to the public pursuant to federal or state law, such as the California Public Records Act and the federal Freedom of Information Act.

In addition, employers should be aware of the following:

  • New Law Doesn’t Change Labor Code Section 1197.5: Even with its exceptions for voluntary disclosure by an applicant and salary information that publicly disclosable, the new law expressly states that it does not change the rule set forth in California’s Equal Pay Act (Labor Code section 1197.5), which does not allow an employer to rely solely upon prior salary history to justify any disparity in compensation. The California Equal Pay Act generally prohibits an employer from paying any of its employees at wage rates less than the rates paid to employees of the opposite sex or another race or ethnicity for substantially similar work.
  • Uncertainty Exists Regarding Applicants’ Salary Expectations: The new law does not expressly prohibit employers from asking applicants about their salary expectations, i.e., how much they would like to be paid. However, unlike New York City’s law, which expressly allows employers to initiate discussions regarding the applicant’s salary expectations, the California law is silent on this issue. Thus, the permissibility of such inquiries is not entirely clear, and employers will have to wait and hope for further clarifying guidance as to this issue.

Additional Considerations for San Francisco Employers

In addition to the new statewide law, private and public employers who are required to be registered to do business in the city of San Francisco must also comply with that city’s salary history inquiry ordinance. The San Francisco ordinance takes effect July 1, 2018.

The San Francisco ordinance is similar to the statewide law, prohibiting employers from seeking or relying upon salary history, but it also includes the following additional restrictions and affirmative requirements:

  • Employers cannot release a current or former employee’s salary history to a prospective employer without the written authorization of the employee (unless the salary history is publicly available).
  • Employers cannot disfavor, injure, refuse to hire, or retaliate against any applicant for not disclosing his or her salary history.
  • Employers must post a notice prepared by the San Francisco Office of Labor Standards Enforcement (“OLSE”) (informing employees and applicants of their rights under the ordinance) in a conspicuous place at all workplaces, job sites, and locations within the city of San Francisco under the employer’s control and frequently visited by their employees or applicants. In addition, an employer must provide that notice to each labor union or worker representative with which the employer has an agreement or understanding.

Similar to the California law, the San Francisco ordinance allows employers to consider an applicant’s salary history when determining salary if the applicant voluntarily discloses such information without prompting, or gives the employer written authorization to inquire about salary history from a current or former employer.

What Employers Should Do Now

To ensure compliance with the new bans on salary history inquiries, California employers, including San Francisco employers, should consider:

  • removing any requests or spaces for salary history information in employment applications, background check forms, and any other forms or policies used in the hiring process;
  • reviewing interview and pre-hire screening practices and policies to eliminate questions about salary history information;
  • training human resources staff, internal recruiters, hiring managers, and any other individuals involved in the hiring process (i.e., those conducting interviews or setting compensation levels at the organization) on the requirements of the new law, as well as how to respond to requests for pay scale information and how to document voluntary disclosure of salary history information by an applicant;
  • preparing a pay scale for open job positions to have this ready to provide to applicants upon reasonable request and identifying the factors (such as training, education and experience, provided that they are required for the position) that will determine where within the applicable range an offer will be made;
  • coordinating with any outside background-checking vendors to ensure that background check forms and vendors do not request salary history when confirming prior employment, etc.;
  • coordinating with external recruiters and headhunters to make sure that they will not provide applicant’s salary compensation history;
  • ensuring that any disclosure of salary history is done on a purely voluntary basis (and without prompting), keeping in mind that it is not permissible to pose a question about an applicant’s salary history with a caveat that answering the question is not mandatory;
  • if an applicant voluntarily discloses salary history information at any point during the hiring process, creating a “memo to file” (or other internal documentation) noting that the applicant voluntarily disclosed this information without prompting and describing the circumstances surrounding such disclosure;
  • considering amending contracts with third-party vendors, such as headhunters, recruiters, and search and placement firms, to:
    • place the vendor on notice of its obligations under the new law,
    • require the vendor to agree that it will comply with the new law, and
    • provide for indemnification for claims made against you based on the vendor’s actual or alleged violation of the new law;
  • if you are required to be registered to do business in the city of San Francisco, obtaining and posting the OLSE’s salary history inquiry ban notice;
  • to the extent that your organization operates in locations outside of California, deciding whether (for administrative ease or public policy reasons) the organization will comply with the California law nationwide,[3] and, if so, taking all of the above steps in all of the organization’s U.S. locations; and
  • if your organization operates in multiple jurisdictions, making sure that electronic onboarding and other tools do not inadvertently continue to ask for (or store) salary history information for applicants seeking job positions in California.

ENDNOTES

[1] Philadelphia’s law is enacted, but its enforcement has been stayed pending the outcome of an ongoing legal challenge.

[2] States with pending legislation restricting salary history inquiries include Georgia, Iowa, Nebraska, New Hampshire, New York, North Carolina, Rhode Island, Vermont, Washington, and Wisconsin.

[3] Note: A uniform practice nationwide may make compliance within California more likely.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Epstein Becker & Green | Attorney Advertising

Written by:

Epstein Becker & Green
Contact
more
less

Epstein Becker & Green on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.