Evaluate Your Pay Practices Now

On September 30, 2016 we posted a blog advising employers to examine pay practices in order to avoid litigation under the Fair Pay Act.  Currently, the California Legislature is debating AB 168, which prohibits an employer from asking an applicant about salary history, including compensation and benefits.  The goal of the legislation is to increase wages paid to women or minorities.  The wages for women are at about 80 percent of wages for men in similar jobs. 

AB 168 has another component.  It requires an employer to provide the “pay scale” for a position to an applicant upon request.  The bill does not define what constitutes a pay scale.  The bill does not suggest how to create a pay scale.  Nor does it indicate what an employer must do if it has not officially adopted a pay scale.  Is a pay scale inferred as the compensation actually paid to all employees?  And what if there is just one person in the position?  Does this mean the “scale” consists of one wage? 

Employers should consider adopting pay scales for positions.  Perhaps it will be the adoption of EDD Labor Market Rates or salary guides published by reputable companies.  This examination and discussion should consider an evaluation of pay to current employees to avoid potential liability under the Fair Pay Act.  We advise companies to consult with their legal counsel in order to provide the most expansive protection for the company and to protect these discussions from disclosure.