Employers, are you basing how much to pay prospective applicants based on what they made at their last job? If so, you are violating California law. To help close the persistent gender pay gap, the California legislature passed a law, which came into effect on January 1, 2018, prohibiting employers and their agents from directly or indirectly seeking or inquiring into a job applicant’s salary history which includes compensation and benefits.
An evaluation of hiring practices should be performed to ensure that salary history is not requested either verbally or in writing. Employers need to review their job applications, both online and on paper, to make sure they are compliant. In addition, employers need to advise and train those employees interviewing candidates not to ask or seek out salary history.
If an applicant voluntarily discloses salary history then an employer may consider or rely on that voluntarily disclosed salary history in determining the salary for that applicant. However, use of that information is still subject to the Equal Pay Act’s caveat that prior pay cannot, by itself, be used as a justification for disparity in compensation between employees of difference races, sexes or ethnicities.
Lastly, prospective applicants have the right to request and receive a pay scale for the position they are applying for. Employers need to prepare for this request by documenting pay scales for each position.
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