California Governor Jerry Brown approved Assembly Bill 168 last October 12, 2017. The bill added a new section to the California Labor Code (Section 432.3) and became effective last January 1, 2018. The law prohibits employers from asking for a job applicant’s salary history information which includes the applicant’s compensation and benefits from their last job. California has followed the steps taken by Massachusetts (signed in 2016, effective July 2018), Oregon (signed in 2017, effective 2019), Delaware (signed in 2017, effective December 2017). New York City also has the same regulations.
Employers usually use a job applicant’s previous salary to gauge their employment value, meaning that the compensation package that you’ll be receiving from the company where you’re applying will be significantly influenced by how much you previously made. This new law eliminates that factor, and you can get the compensation package that you deserve based on what the company is willing to pay for that position. For example, you’re applying as a file clerk in a law firm, and the law firm’s budget for the job ranges from $27,000 – $34,000. If your previous employer was only paying you half of that range, your prospective employer might go under their budget since you’re not expecting that much of a raise.
Under the new law, a job applicant may also request for the salary range of the position they are applying for; this gives job seekers an advantage when it comes to salary negotiations since they already know how much they can expect from the post and may be able to leverage their skills and expertise.
One of the bill’s backers has said that one of the goals of the new law is to help reduce the gender wage gap. Since an applicant no longer needs to disclose how much they previously made and can be provided with the ballpark of much they can make with a new employer, the playing field is leveled for all the applicants no matter the gender.
Here are the critical points of the new law:
1. All employers, no matter the size of the company, should adhere to the new code by January 1, 2018.
2. Employers must not use an applicant’s salary history to determine whether they would offer employment or to determine the applicant’s compensation.
3. Employers must not ask for an applicant’s salary history in their application forms or interviews.
4. The applicant may ask for the salary range that the employer is offering for the open position.
5. An applicant may disclose their salary history to a prospective employer, provided that they do it willingly.
The law is not foolproof though. Because it’s an applicant’s choice to disclose their salary history to a potential employer, the employer may pick them instead of someone who’s not willing to reveal theirs. As a job seeker it’s up to you to decide, but would you be willing to work for an employer who bases their decision on salary rather than skill?
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