Financial Advisory Blog

Armanino’s Financial Advisory blog is your source for thought leadership around cloud ERP and accounting solutions and integrations. Supported by the Cloud Accounting Institute and numerous experts in cloud, finance, reporting, integration, compliance, and technology, Armanino’s Financial Advisory blog features must-read content on what’s happening in the finance industry, case studies, white papers, and much more.

January 3, 2018

Salary History Legislation

Posted by Shannon Oswald

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.

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