New Labor Code § 432.3

Effective January 1, 2018, a new California law prohibits all employers—both private and public—from relying on a job applicant’s salary history in determining whether to offer employment and what salary to offer an applicant.

This new law is Labor Code § 432.3. Employers are now prohibited from seeking an applicant’s salary history orally, on a written application, or through an agent. This new law also requires employers to provide the pay scale to an applicant, “upon reasonable request.” The law is intended to combat pay inequalities in the workforce.

Section 432.3 applies only to an applicant’s private sector salary history.  Salary history that can be disclosed pursuant to federal or state law, including the California Public Records Act and the Freedom of Information Act is exempt from the new law.  Employers can legally inquire into an applicant’s salary history with government entities and consider that information in determining whether to make an offer of employment and what salary to offer.

Employers should consider this law as they conduct their hiring processes. Here are the highlights of this new law that all employers should be aware:

• The law applies to all private and public employers, regardless of size, effective January 1, 2018.
• Employers may not seek salary history information, which includes compensation and benefits, about an applicant.
• Employers may not rely on an applicant’s salary history information in determining whether to offer employment and the amount of salary to offer.
• “Upon a reasonable request,” an employer must provide the pay scale for the position to an applicant.
• This law does not prohibit an applicant from voluntarily disclosing salary history information.
• The law does not prohibit prospective employers from considering voluntarily disclosed salary information in determining what salary to offer. It is important to note that this exemption does NOT permit an employer to consider voluntarily disclosed information in determining whether to offer employment.

Article authored by Litigation Attorney,

Courtney de Groof