Laws are changing all of the time, making it quite hard on HR to keep up with it all. Right now, all the buzz is around California's salary history bill - also known as AB 168.
In short, the bill stops employers from inquiring about an applicant's previous salary history. This means that both public and private companies will no longer be allowed to ask that question during or after the interviewing process, but it's a bit more complicated than that.
Let's get started.
A Short History of the California Equal Pay Law
The law was originally established in 1949, requiring equal pay for men and women, for equal work. The law remained basically the same until 2016, when the original law was amended to require equal pay for “substantially similar” work. The 2016 revision prohibited employers from using prior salary histories to justify a current disparity in the compensation between genders.
On October 12, 2017, Governor Jerry Brown signed AB 168, an amendment to the California Equal Pay Law that prohibits California employers from asking job applicants about their salary histories orally or in writing.
The law becomes effective on January 1, 2018 and will apply to all employers, including state and local governments. In addition, an applicant may “upon reasonable request” ask for a pay scale for a job.
The new California Salary History Bill was designed to narrow the pay gap between men and women by emphasizing the value of a position rather than the value of an individual based on his or her prior earnings.
New York City also implemented a salary history ban effective on October 31, 2017 and poses severe penalties for violations. Delaware, Oregon, and Massachusetts have also passed salary history laws.
There are a few exceptions to the salary history restriction. For example:
- Employers can review and consider salary history information that is publicly available pursuant to federal or state law.
- Salary history may also be discussed if an applicant “voluntarily without prompting” discloses his or her salary history to an employer.
Obviously, this changes how hiring takes place, but what does it change about outplacement coaching? Let's take a look.
How will the California Salary History Bill Impact Outplacement Coaching?
As more states pass equal pay laws, employers, human resource personnel, hiring managers, recruiters, career consultants, and others will need to learn and be well-versed in state laws regarding salary history compliance to better advise those in career transition.
A few changes employers will need to make to comply to the new salary history laws and career consultants will need to know to help advise those in salary negotiations include:
- Employment applications will need to be revised to remove salary history requests.
- Screening and interviewing practices will need to be modified to eliminate questions about salary history.
- Hiring personnel will need to be trained regarding permissible compensation questions to ask during an interview as well as how to respond to requests for pay scale information and voluntary disclosure of salary history by an applicant.
- Employers will need to produce pay scale info to applicants “upon reasonable request.”
That's a lot to consider, especially because the laws are constantly changing.
Because of this, employers with operations in California may need to make changes to their recruitment processes, including applications, and train or retrain hiring resource personnel to make sure they are in compliance. Employers must be aware that where salary history is permitted, salary history by itself cannot justify a disparity in the pay between males and females who are performing substantially similar work.
So, when it comes to coaching, it's important that coaches pay attention to upcoming law changes in their areas to make sure that they follow them appropriately.
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