Last week, California Governor Jerry Brown signed Assembly Bill 168, which prohibits employers from asking candidates about their salary history during the interview process. The bill also requires employers to provide accurate pay ranges for open positions should candidates inquire about the pay for these positions during the interview process. The law affects employers in both the public and private sectors and goes into effect on January 1, 2018.
California joins Massachusetts, Delaware, Oregon, Puerto Rico, New York City, Philadelphia, and other locations across the US in banning salary history inquiries. These laws are designed to combat established pay inequalities in the market and existing disparities in compensation that can reduce employees' future earning power. For employees who have experienced pay discrimination in their careers, disclosing past salary details to new employers may put them at a disadvantage when negotiating future compensation packages.
How Organizations can Adapt to the California Salary Ban
Organizations with operations in California will need to take a hard look at their compensation processes before the end of the year. Here are some things to think about before January 1st:
- What market pay data do we have access to that can inform new offers?
- Where in the recruiting and hiring processes do we typically ask about candidate salary histories?
- Do we need to make changes to our ATS or recruiting technology platforms to remove this question from job applications?
- How do we plan to communicate about these changes to hiring managers and recruiters?
- What sorts of training programs can we offer for hiring managers, both now and in the future?
- How will we handle candidates who voluntarily disclose their salary histories?
Lawmakers and HR professionals continue to examine the issue of fair pay through many lenses. Whether or not your state is considering legislation to ban salary history inquiries, you should focus on the bigger picture and take a proactive approach to ensuring that pay in your organization is both externally competitive and internally equitable. Market pricing reviews, pay equity analyses, and the removal of questions surrounding candidate salary histories from recruiting platforms are all necessary approaches to answering the same underlying question: is pay in my organization really fair for every employee?