California New Employment Laws - Effective January 1, 2018

I wanted to take a moment and bring everyone up to speed on a couple of laws approved and/or signed by the Governor of California recently.

Governor Brown approved AB 168 on October 12, 2017, creating new Labor Code section 432.3. This law prohibits employers from seeking or taking into consideration an applicant’s prior compensation and benefits when determining whether to hire an applicant. This means employers can no longer ask applicants for compensation history during the pre-hire process including employment applications or interviews.This law goes into effect on January 1, 2018 and will apply to all employers in the state of California regardless of size.

Employers should start thinking about how this will impact their operation. Below are a few items to consider regarding this new laws:

  • Inform/train hiring managers about the new law and ensure they understand they cannot seek information from applicants regarding prior salary and benefits history.
  • Eliminate all verbiage on applications or other documents provided to candidates that may directly ask or elude to questions regarding prior employment salaries.
  • Consider establishing a set “pay scale” for the all company positions. Since employers must provide the “pay scale” (upon a reasonable request) to an applicant for the position they are applying, employers should consider whether the established pay scale will be provided in writing. This will help resolve any dispute about whether the pay scale was provided to the applicant and what information was actually conveyed.

Details regarding AB 168 including employer requirements can be found here.

Furthermore, Governor Brown signed AB 1008 on October 14, 2017, which will add a section to the California Fair Employment and Housing Act (FEHA) containing new state-wide restrictions on an employer’s ability to make pre-hire and personnel decisions based on an individual’s criminal history, including a significant “ban-the-box” component (already active in the city of Los Angeles). AB 1008 also goes into effect on January 1, 2018. This law prevents employers from requesting the disclosure of an applicant’s conviction history prior to a conditional job offer and mandates an individualized assessment of an applicant’s criminal history prior to any employment decision based on a criminal record.

Governor Brown signed a similar bill in 2013 prohibiting state and local agencies from asking an applicant to disclose conviction information until the applicant is determined qualified for the position. AB 1008 now extends this prohibition to all employers in California with five or more employees. AB 1008 outlines the process employers must follow when obtaining conviction information, using conviction information for an employment decision, and allowances employers must make for applicants who wish to dispute an adverse employment decision.

Details regarding AB 1008 including employer requirements can be found here.

For more information please feel free to reach out to myself or any member of the People Solutions team at Morrison.

About the Author
+Jesse Converse is a consultant with Morrison, providing business valuations, business planning (including budgeting, cash flow forecasting, and strategic planning), feasibility studies, interim controller services, recruitment, competitive grant writing and special projects that don't fit into any conventional category. You can contact Jesse directly at jconverse@morrisonco.net or via telephone at 530-809-4670.

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