California has updated its labor laws around the salary and criminal histories of job applicants. Find out how to stay compliant.

Fair hiring practices are important for employers and employees alike, helping to ensure the best candidates are hired for the right positions, without bias. In recent years, many states and municipalities have passed various pieces of legislation to further this goal.

California is now following suit with the passage of two new laws around hiring new employees. These labor laws both go into effect on January 1st, 2018, giving employers just a couple months to get up to speed. Below, find an overview of these laws, and some suggestions for helping your company stay compliant in the new year.

Get to Know the Laws

Salary History

On October 12th, Governor Jerry Brown signed AB 168, a new law to change the way California employers approach salary offers. This law prohibits employers, including state and local governments, from asking job applicants about their salary history — including benefits and compensation.

This law is meant to help eliminate pay gaps, particularly in regards to gender wage discrimination. The logic is that if the applicant’s pay at their previous job was based on discriminatory practices, then using that salary as a benchmark will perpetuate the inequity.

This law is meant to help eliminate pay gaps, particularly in regards to gender wage discrimination.

The ban applies to both oral and written inquiries, whether they’re made directly by an employer or through an agent. Employers cannot rely on the salary history information of an applicant as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant. In addition, the law requires employers to provide applicants with a pay scale for the relevant position upon request.

There are exceptions to the salary history restriction:

Employers may review and consider salary history information that is publicly available pursuant to federal or state disclosure laws.

Salary history may be discussed if an applicant “voluntarily and without prompting” discloses salary history to a potential employer. In such an event, the employer may not consider the volunteered salary history information in determining whether or not to hire the individual, but the employer may consider and rely on such information in setting that applicant’s salary.

If this law sounds familiar, that’s because California joins many other states and municipalities that have enacted similar laws. Delaware, Massachusetts, New York, Puerto Rico and Oregon, as well as Philadelphia, New York City and San Francisco, also restrict or ban employers from asking applicants about salary history. In fact, New York City’s law just went into effect on October 31st of this year.

Need more info on staying compliant when hiring? Get the Guide

Criminal History

Just two days later on October 14th, the governor signed AB 1008, also known as “Ban the Box” legislation, which applies to most public and private employers with five or more employees. This law prohibits employers from including a “box,” or questions on job applications that ask about conviction history.

The legislation is meant to help ease the stigma against the approximately 7 million Californians who have a prior arrest or conviction. Many feel an arrest or conviction record unfairly prevents people from being hired for good jobs. With AB 1008, California joins 29 states and over 150 cities and counties that have enacted ban the box proposals.

Under this law, employers will no longer be allowed to ask applicants about their criminal conviction histories until after a conditional offer of employment has been made.

Consider revising job applications to remove any questions about salary or conviction history.

If an employer does decide to deny an applicant the position solely or in part because of the conviction history, the employer must make an individualized assessment of whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.

The assessment must consider:

The nature and gravity of the offense and conduct

The time that has passed since the offense or conduct and completion of the sentence

The nature of the job held or sought

Once the employer makes a preliminary decision that the applicant’s conviction history is disqualifying, the employer must notify the applicant in writing.

This notification must contain:

Notice of the disqualifying conviction that is a basis for the preliminary decision

A copy of the conviction history, if any

An explanation of the applicant’s right to respond to the notice within at least five business days. That the response may include submission of evidence challenging the accuracy of the conviction record, or evidence of rehabilitation, or mitigating circumstances or both.

The notification may also justify or explain the employer’s reasoning for making the preliminary decision, although this isn’t required. During this five business day period, the employer is prohibited from making any final determination based on conviction history.

If the applicant notifies the employer in writing within that time that he or she is disputing the conviction history and is taking steps to obtain evidence to support this, the employer must provide five additional business days to respond to the notice.

If the employer makes a final decision to deny based on the conviction history, the employer must again notify the applicant in writing. This should include notification of any existing procedure the applicant has to challenge the decision or request reconsideration, as well as notification of the applicant’s right to file a complaint with the Department of Fair Employment and Housing.

From there, the applicant will have an opportunity to respond, and the employer must consider that response before making a final decision.

There are some exceptions for certain positions. This law does not apply to:

Positions for which a state or local agency is required by law to conduct a conviction history background check

Criminal justice agencies

Farm labor contractors

Employers required by state, federal, or local law to conduct background checks or restrict employment based on criminal history.

Employer Next Steps

Both of these laws go into effect on January 1st, 2018. As an employer in California, it’s a good idea to take some time over the next couple of months to enact policies and practices within your company to help ensure that you’re being compliant with the new laws come January.

Here are some recommended next steps:

Revise all job applications to remove any questions about salary history or conviction history

Modify your screening and interview process to eliminate those same questions

Train hiring managers on the new laws, making them aware of what they can and cannot ask applicants and related policies/processes

Prepare payscale information for applicants that may request it

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.