Armanino Blog
Article

Salary History Legislation

by Shannon Oswald
January 03, 2018

Effective January 1, 2018, new California legislation (AB 168) makes it no longer permissible for employers to ask candidates to provide salary history information. The new law applies to all employers. Under AB 168, employers are not allowed to review an applicant's prior salary history to determine whether or not to hire the candidate, or what to pay the person if they are hired. Salary history information includes all of a position's compensation, including cash and other benefits. Employers should also be prepared to provide candidates with pay scale information about a position if the candidate makes a reasonable request.

Other states and local jurisdictions have similar legislation already in place or soon to be adopted. Ultimately, this new law seeks to avoid perpetuating wage inequality by requiring the hiring employer to base wage decisions on valid job/position information, rather than relying on previous wage decisions that may or may not have been based on a discriminatory practice.

If an employee voluntarily provides previous salary information to a potential employer, this information can be discussed (but the employer can't directly ask them to disclose this information.) Also, if salary information is publicly available, employers can review and consider it.

Because of this new law, California employers might want to consider updating any employee handbooks or policies to make sure this new information is incorporated into their processes. Keep in mind, previous salary history cannot be used to justify disparities in wages for employees engaged in similar work.

Stay In Touch

Sign up to stay up-to-date with the latest accounting regulations, best practices, industry news and technology insights to run your business.

Authors
Shannon Oswald - Director, Consulting | Armanino
Director
Resources
Related News & Insights
SaaS Market Trends
Webinar
Between the uncertainty of 2022 and the highs of 2021, what will 2023 hold?

December 14, 2022 | 09:00 AM - 10:00 AM PT
Fraud: Current Trends & Hot Topics
Webinar
Don’t let fraud negatively impact your organization.

December 8, 2022 | 11:00 AM - 12:00 PM PT
Year-End Tax Planning for High-Net-Worth Individuals
Webinar
Optimize your tax position before December 31.

December 8, 2022 | 09:00 AM - 10:00 AM PT