California is set to become the latest—and by the far the largest—US state to prohibit employers from asking job applicants about their salary history.
The law, which was signed last week and goes into effect in January, is intended to help close the gender pay gap, which is perpetuated when a woman’s pay is based on her previous low salary. California follows Massachusetts, Delaware, and Oregon in passing the law, as well as cities like New York City and Philadelphia.
Thousands of California employers will be affected, but none as prominent as those in Silicon Valley, home to giants like Apple, Google, and Facebook. The tech industry’s problems with sexism are well documented, and that extends to initial offers to job candidates. According to a study by Hired, a job site focused on the tech industry, women hired for the same job at the same company receive a lower offer than men almost two-thirds of the time, and they’re offered 4% less money on average.
The pay-privacy law could help put an end to the double bind women are in, where they’re punished by employers both when they reveal their salaries, and—as studies suggest—when they refuse to provide it when asked. The new law not only bars employers from asking applicants about pay history, but requires them to provide the salary range for the opening if asked. Candidates are still free to volunteer their salary history if they so choose.
Perhaps not surprisingly, the state’s businesses lined up to fight the effort. The California Chamber of Commerce, which represents the state’s employers, argued that asking about previous salary was actually helpful to the applicant because employers might not know the current market rates for the position. Asking about the salary history might lede them to adjust their offer upward, the Chamber claimed in a sample of letters it urged its members to write.
While California employers chafed at losing their fight over pay-privacy law, they’re celebrating a bigger win: They secured governor Jerry Brown’s veto of a law that would have required California companies to publicly disclose the size of their gender pay gap. In a statement, Brown said unclear language in the bill meant “this ambiguity could be exploited to encourage more litigation than pay equity.”
It’s a setback for advocates of fair pay in California, but nothing in politics is permanent. Brown also vetoed the pay-privacy law when it first surfaced in 2015. He may someday change his mind about the pay gap disclosure measure as well.