Our Impact: Salary History Loophole Closed! | Equal Rights Advocates
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Our Impact: Salary History Loophole Closed!

August 10, 2018 | by

We’re thrilled that Stronger CA priority bill “Closing the Salary History Loophole” (AB 2282 – Eggman) was fast-tracked by Governor Jerry Brown and signed into law on July 18.

This bill will close a significant loophole in California’s ban on using prior salary history to justify pay discrimination: Until now, employers could point to a person’s prior salary to justify paying them less, as long as they could also point to other, different factors. Under 2282, prior salary cannot be used at all to justify wage disparities under the California Equal Pay Act, which prohibits unequal pay based on gender, race or ethnicity.

Introduced by Assemblymember Susan Talamantes Eggman, AB 2282 was co-sponsored by Stronger California members Equal Rights Advocates, AAUW, and the California Employment Lawyers Association (CELA).

 

Why is AB 2282 important?

  • No more waiting to find out what a job pays

AB 2282 will also require employers to provide a position’s salary range or hourly wage scale to a prospective employee (i.e. job applicant) upon “reasonable request” — any time after the applicant completes an initial interview with the employer.

This means no more wasting weeks, taking off work, or traveling for multiple interviews only to find out a prospective job pays way too little. For working single moms, low-wage workers, and many others in California, this is a huge victory.

 

  • Breaking the cycle of pay discrimination

Prior salary often comes with a built-in history of discrimination based on a person’s race, ethnicity, and/or gender.

By making it clear that a person’s prior salary or hourly wage cannot justify any gender or race-based pay differential for equal work (whether by itself, or accompanied by lawful factors), AB 2282 closes a significant loophole and allows California to continue leading the nation on equal pay laws.

Now, employers can only rely on legitimate, non race or sex-based factors to justify paying one employee less than a co-worker of a different sex or race for equal work.

This interpretation is consistent with a federal opinion by the 9th Circuit issued in April, which said employers cannot use prior salary at all (neither alone, nor with other lawful factors) to justify pay disparities under the federal Equal Pay Act, because “[r]eliance on past wages simply perpetuates the past pervasive discrimination that the Equal Pay Act seeks to eradicate.” (Equal Rights Advocates argued before an en banc panel in this case.)

By seeking salary history from job applicants and relying on it to set a new employee’s pay rate, employers perpetuate historical discrimination and wage inequalities across the every job sector. Women earn less than men starting just one year out of college, even when controlling for factors like major, occupation, and hours worked. Because women frequently begin their careers earning lower salaries than men, they remain at a stark disadvantage throughout their working lives, especially when employers set pay based on prior salaries.

To support other bills in Equal Rights Advocates 2018 Stronger California legislative agenda — to reduce pay discrimination, help end sexual harassment, increase protections for domestic workers, and make child care more affordable — click here.

 

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