California’s state legislature is nearing the end of its term, and employers are beginning to glimpse some of the laws that could apply in 2018. There are multiple proposed bills that prohibits employers’ ability to rely upon or seek information about applicant’s previous wages to set the employee’s pay. This Friday’s Five reviews the current law – California’s Fair Pay Act, the proposed bills on disclosure of wages, and San Francisco’s local ordinance that recently passed.
1. Current law – California’s Fair Pay Act (Labor Code section 1197.5)
Existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work for work performance that requires equal skill, effort, and responsibility that are performed under similar working conditions. Effective as of January 1, 2017, AB 1676 amended California’s Fair Pay Act, found in Labor Code section 1197.5, prohibiting employers from relying on an employee’s prior salary, by itself, to justify any disparity in compensation. It is important to note the bill was modified to take out language that would have prohibited employers from obtaining an applicant’s prior salary.
2. Proposed State Bill – AB 1209 – Gender Pay Gap Transparency Act
This bill has been sent to the Governor’s desk during the week of September 11, 2017 to be signed into law or vetoed. The bill, if signed by the Governor, would require employers with at least 500 employees to calculate the difference between the wages of male and female exempt employees in California by each job classification or title. The employer would also have to do the same for all board members who are located in California. The employer would need to report the difference in pay, which would be published on the Internet by the Secretary of State. Governor Brown has until October 15, 2017 to sign or veto the bill.
3. Proposed State Bill – AB 168 – Salary Information
This bill prohibits employers from replying upon or seeking salary history from applicants. In addition, employers would be required to provide the pay scale for a position to an applicant.
4. San Francisco local ordinance: Parity in Pay Ordinance
San Francisco passed a local law that prohibits employers from asking job applicants to disclose their salary history. It also prohibits employers from considering an applicant’s pay history as a factor in determining the level of pay to offer. The law is effective July 1, 2018, so San Francisco employers have some time to review hiring practices to comply.
5. Proposed State Bill – AB 46 – Wage Discrimination
This bill amends the California Fair Pay Act to make clear that the law applies to both public and private employers.