Warning to California Employers: Do not ask prospective employees about their past earnings.
Over time, the law has evolved to restrict topics on which an employer can safely inquire of a prospective employee. A further step in that direction is the Salary Privacy Bill, AB168 (which will become Labor Code 432.3), which was signed into law by California Governor Jerry Brown and will become effective on January 1, 2018.
Under the law, an employer may not ask a prospective employee how much he or she earned at a previous job. The law applies to both genders but was largely, if not entirely, drafted to prevent underpaid women from being forever tied to their lower wages.
The law also requires an employer, upon request, to divulge the pay range available for a particular position. California joins Oregon, Massachusetts and Delaware, who previously adopted similar laws.
Arguments against the law include: (1) existing laws already mandate equal pay among genders for the same position, (2) there are non-discriminatory reasons for an employer to inquire about past compensation and (3) the new law will result in extra litigation, driving up the cost on already- overburdened California small business owners.
Notably, the law does not apply with respect to published salaries. Furthermore, if a person volunteers their salary information, this law does not prohibit an employer from using that information to determine what rate of pay to offer, although an employer in that case should be mindful of other relevant laws.