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September 06, 2016
California, NYC Consider Limiting Use of Salary History

Employers in California and New York City may soon face new limits on the use of applicants’ salary history.

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California’s legislature recently approved a bill aimed at ensuring employers do not pay female employees less than their male colleagues because of their previous salaries. It sent the legislation to the state’s governor August 29.

gender pay gap Relying on prior salary to set employees’ pay rates contributes to the gender wage gap by perpetuating wage inequalities across the occupational spectrum, the bill says: “When employers make salary decisions during the hiring process based on prospective employees’ prior salaries or require women to disclose their prior salaries during salary negotiations, women often end up at a sharp disadvantage and historical patterns of gender bias and discrimination repeat themselves, causing women to continue earning less than their male counterparts.”

The state’s governor, Jerry Brown, will now consider the bill. According to the Los Angeles Times, he vetoed a similar measure last year because it would have prohibited employers from requesting salary history information. AB-1676 contains no such provision.

Similar legislation pending before New York’s city council would prohibit employers from requesting applicants’ pay history.

The bill (Int 1253-2016), introduced August 16, also would prohibit employers from searching publicly available records for an applicant’s salary history. And if an employer is already aware of a prospective employee’s salary history, the bill would prohibit reliance on that information in determining his or her salary.

“When employers rely on salary histories to determine compensation, they perpetuate the gender wage gap,” the bill’s summary says. “Adopting measures like this bill can reduce the likelihood that women will be prejudiced by prior salary levels and help break the cycle of gender pay inequity.”

Massachusetts recently adopted similar restrictions that take effect January 1, 2018.

Kate TornoneKate McGovern Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics and currently writes for HR.ComplianceExpert.com and HR.BLR.com. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, co-authored the Guide to the ADA Amendments Act, and published several special reports. She graduated from The Catholic University of America in Washington, D.C., with a B.A. in media studies.

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