Pay equity and transparency laws are being considered within the United States and by many countries. For example, internationally, Europe is reviewing a potential law requiring all wages to be published, Iceland requires companies to prove pay equity since 2018, and a similar law in Canada has passed for employers with 10 or more employees. Here in California, employers face a number of regulations under California and Federal law pertaining to employees’ ability to discuss wages, prohibition on salary history inquiries, the nation’s first “pay transparency” requirement, and equal pay requirements. Here is a summary five critical equal pay laws California employers must understand:
1. Right for employees to discuss pay.
Employers cannot limit employee’s discussion of their wages and workplace environment. For example, employers cannot prohibit employees from discussing or disclosing their wages, or for refusing to agree not to disclose their wages under Labor Code Sections 232(a) and (b). In addition, employers cannot require that an employee refrain from disclosing information about the employer’s working conditions, or require an employee to sign an agreement that restricts the employee from discussing their working conditions under Labor Code Section 232.5.
2. Employers may not ask applicants about prior salary.
Effective January 1, 2018, Labor Code section 432.3 prohibits California employers from relying on salary history information of an applicant in determining...
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