New restrictions on employers in California, potentially other states, mean ‘significant changes’ to hiring practices

By Justin Stoltzfus | May 16, 2018

SACRAMENTO — Two California laws, which prevent employers from looking at either a job applicant’s salary or criminal history before extending a job offer, have forced employers to make ‘significant changes’ to their hiring practices, a San Francisco-based labor and employment lawyer said.

Rebecca H. Stephens, an attorney at Farella Braun + Martel, noted California passed a ‘ban the box’ statute prohibiting employers with five or more employees from asking about or considering an applicant’s criminal history until after an applicant has received a conditional job offer.

Employers are barred from considering certain types of criminal background information, such as arrests that did not result in conviction or convictions that have been sealed or expunged, Stephens said.

Also last year, California passed a salary history ban preventing employers of any size from asking applicants for their prior salaries or relying on salary history information in making hiring and pay decisions, Stephens said, coupling that with a requirement for employers to provide applicants with a pay scale for the position "upon reasonable request.”

Rebecca Stephens   Farella Braun + Martel

“Ban the box” statutes aim to force employers to remove a check box on job applications that asks if applicants have a criminal history. However, Stephens said California’s new rules differ from most “ban the box” restrictions because they apply to both public and private employers. 

While 30 states, including Illinois,have placed limitations on public employers’ ability to use an applicant's criminal history when making employment decisions, Stephens said only 11 states have placed restrictions on private employers. And only four states have barred employers from looking at an applicant's previous salaries.

Stephens said that similar measures could be taken in other states. Illinois, for its part, has already passed “ban the box” rules and nearly passed a salary history ban last year.

“Many state legislatures are currently considering legislation similar to California’s,” she said.

Stephens said that the changes in California will require a lot of re-education in human resources departments.

“The salary history ban is particularly challenging from a practical standpoint,” Stephens said. “For example, while the law allows applicants to voluntarily disclose salary history information without prompting and does not prevent employers from relying on voluntarily disclosed information, it is not clear how this will actually play out in the context of wage negotiations. In addition, the law requires employers to provide a pay scale for the position upon reasonable request. But many employers had not previously established a pay scale for each position and therefore had to create one.”

Stephens advised California employers to re-tool job applications, re-train hiring managers and create a “consistent and neutral individualized assessment policy for the consideration of applicants’ criminal backgrounds."

“Consider developing a standard process by which applicants can challenge adverse employment decisions based on criminal background in compliance with (state law),” she said.

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