It is that time of year.  We continue to wait for the Governor to sign or veto some controversial bills such as:

  • The Stand Act (prohibiting confidentiality in harassment and sexual assault settlements); and
  • AB 3080 (prohibiting mandatory arbitration for new and current employees, but presumably allowing arbitration with an opt out, and prohibiting nondisclosure of harassment issues to protect future employees going forward).

As we wait, there was one bill recently passed that clarifies a few things about California’s salary history ban that is worthy of a quick mention.

As you may recall, effective this year, employers were prohibited from asking an applicant about his/her salary history.  Employers are also required to provide pay scale information to an applicant on the position applied for upon reasonable request.  Recently, some of those terms have been clarified, as follows:

  1. First, an applicant is now defined as an individual seeking employment who is not currently employed with that employer in any capacity or position.  So current employees are not entitled to pay scale information.
  2. Second, a reasonable request, is now defined as a request made after an applicant has completed an initial interview with the employer.  This would prevent someone not qualified for a position from obtaining salary range information about it.
  3. Third, pay scale is defined as a salary or hourly wage range for the position.  Not quite sure what the confusion was there.
  4. Fourth, as most of us already surmised, it is perfectly acceptable to ask an applicant about his/her salary expectations.
  5. And finally, while prior salary cannot justify any disparity in compensation, an employer can consider current salary as a factor to justify a wage differential as long as it is based on:
    • A seniority system;
    • A merit system;
    • A system that measures quality or quantity of production; or
    • A bona fide factor other than sex, race or ethnicity (such as education, training, or experience).

Now if only the legislature would take up some very serious issues facing employers, especially after Dyanmex (and the resulting war against contractor status), such as my personal favorite idea, to create a new category of workers called “dependent contractors”.  Maybe next term.  One can always hope.

Are you worried about the threat posed by prior-salary-question-askers? Well then you can sleep soundly knowing that your California Legislature has tackled this thorny issue.

AB 1017, one of the bills sitting on the Governor’s desk from the last legislative session, would add language to the California Labor Code saying:

An employer shall not, orally or in writing, personally or through an agent, seek salary history information, including, but not limited to, compensation and benefits, about an applicant for employment.

Copyright: olegdudko / 123RF Stock Photo
Copyright: olegdudko / 123RF Stock Photo

Proponents of the measure say that such questions can continue the effects of past discrimination. But so can questions about job titles, job duties, and even where someone worked. Besides, it’s already illegal to pay someone less for substantially similar work and saying that their prior employer paid them comparably is not a defense.

On the other hand, asking about past compensation helps employers assess how prior employers valued the applicant’s contribution, whether an applicant’s salary expectations are realistic, whether the compensation the employer is offering is competitive, whether the applicant’s skills are valued in the marketplace, and whether the applicant has been successful in his or her prior jobs.

Many of us were taught it was rude to ask someone what they made. But no one ever said it was criminal! We’ll offer recommendations for employers if the bill becomes law.

Update (October 5, 2015): The bill still hasn’t been signed. But a proponent of the measure has shown me that a violation of the statute would not be a misdemeanor. I apologize for the error.

Further Update (October 12, 2015): VETOED!

I just had the pleasure of attending the Cornell HR in Hospitality Conference in Las Vegas, with my colleagues Carolyn Richmond, Alka Bahal, and Rachel Silverstein. I participated in the Executive Summit and shared ideas with some of the most progressive minds in the hospitality industry. Here is my top ten list of take-aways:

1. Rather than thinking of employment “at-will,” just think of it as employment of “free will.”

2. Just because you call someone an intern, does not mean you can not pay them minimum wage regardless of whether they are getting class credit, lawsuits by interns are on the rise.

3. Even Wall Street has learned that management trainees are not exempt, at least for the first six months of their tenure (if not longer).

4. To make sure employees are engaged and productive as the economy improves, don’t just conduct exit interviews, but also conduct periodic “stay interviews.”

5. Employee “opinion” surveys are outdated; the new approach is employee “engagement” surveys.

6. The unemployed may be a new protected category, so watch out for any blanket rule prohibiting hiring of individuals with employment gaps on their resume.

7. When responding to agency charges (EEOC or DFEH), do not attach your entire handbook or full policies, just attach excerpts; the agencies are now scrutinizing policies and looking for fault.

8. There is no such thing as an “automatic gratuity” (such as for a party of 8 or more); if it is not discretionary then it is a service charge, which means that it is included in the regular rate for overtime and sales tax calculations.

9. Employers who want to hire attractive people to service clubs and bars are creating job descriptions that require performances during the shifts, such as dancing or walking down a catwalk.

10. The new I9 form must be used by May 7th, so start using it now, and make sure you train the employees responsible for filling it out. There are many traps for the unwary and even minor violations can be costly. See Alka Bahal’s blog post for tips.