Employers Think Past Salary Question Ban Isn’t Going to Work

Recently, California enacted legislation designed to remove some of the traditional barriers to employment.  The new law bans most employers from asking about criminal history and past salary history in an initial application.  Once an applicant has been offered a position, a criminal background check may be performed for certain occupations, but the idea behind the law is to put all applicants on equal footing during the hiring process.  It is far too easy for an employer to skip over an applicant with a criminal history.  The ban on asking about salary history is designed to require employers to make a salary offer based upon the demands of the position and the strength of the applicant. If the prospective employer knows how much an applicant was making before, they would know the base amount an employee took in the past and this would let them make a lower offer in many cases.

As is discussed in a recent article from the Los Angeles Times, that stated reason for banning asking  about salary history, among others, is to narrow the gender gap in pay.  To get an idea of the actual pay gender gap, we can look to data from the Institute for Women’s Policy Research which shows that while women make up nearly half of the entire workforce, the gap is still very much in existence and women earn on average, 80 cents on the dollar as compared to a man in the same or similar job.  As our Orange County employment lawyers can explain, one of the main reasons past salary history is critical in the context of gender gap is because employers have traditionally paid women less and they are finding themselves in a poor negotiating position, so it is difficult to make progress.  If an employer does not know of the the previous salary when making an offer, the idea is that it will be more of an unbiased offer.  However, as discussed in this article, employers are thinking this new law will not achieve the desired effect.

This position taken by employers comes from a survey of 108 employers in California, and of those companies, roughly 66 percent of them said this would not work at all, and if it did work, it might only help to narrow the gender gap slightly.  While there are reasons one could argue they are correct such as there is still nothing preventing the companies from making lower offers to women, that is not the reason they gave.  The most common reason given by employers is that they don’t have a gender gap at their respective companies, and even if they did, it is only a effects a very small handful of employees.  They also claim they have systems in place to prevent any significant gender gap in pay when making offers to prospective applicants.

While this would nice believe, and would mean they are operating in a perfect world, we all know this cannot be true.  If it were true, there would not still be a 20 percent gender gap in pay, and there would be no need for the law in the first place.  Since the law, and the need for it, was well-supported by data on pay between the two genders, we have evidence that whatever self-created systems these companies are using clearing are not working as intended.

Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 949.375.4734.

Additional Resources:

Employers don’t think bans on asking about salary history will achieve goal, survey says, November 17, 2017, By Jenna McGregor, LA Times

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