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Pay-Privacy Act: Companies Can’t Ask Job Applicants About Previous Salary

Many new laws are effective this month including the prohibition of employers asking potential candidates for hire how much their previous salary was.

In job applications and interviews one of the most common questions asked to candidates is, “What was your previous salary/What is your current salary?” Salary history of potential employees helps employers determine how much the candidate will be compensated if hired.

To close the gender pay gap, a new San Francisco, CA ordinance effective Jan. 1, 2018 prohibits employers from asking this question. Other cities and states have already had this law in effect including Delaware and New York City. Throughout the next two years, Massachusetts, New Orleans, Oregon, Philadelphia, Pittsburgh, and Puerto Rico will also join in.

How does this have any effect on gender you might wonder? If a woman is paid less than her men counterparts doing the exact same job and a new employer bases her new salary on her prior salary, gender discrimination is perpetuated.

The law bans the act of asking prior/current salary verbally, in-writing, or by a third-party agency. However, if the candidate voluntarily offers this information, the employer can use this information to determine how much the new hire will be compensated.

In addition, employers must provide a salary range to job seekers who inquire about how much money the vacant job will be paying.

This new law signed by Governor Jerry Brown back in October 2017 is applicable to all public and private sectors in the state of California.

Some advice to employers to ease your way into this new law:

  • Make revisions to employment applications to remove any questions that allude to asking candidates about their prior salary
  • Make adjustments to your screening and interview processes to ensure questions about salary history are eliminated
  • Train your hiring managers how to properly respond to requests for pay scale information and voluntary disclosure by the candidate of their previous salary
  • Have pay scale information ready to provide to applicants when requested.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.