Practical considerations include knowing what it takes to attract the candidate, how the proposed pay rate fits into your compensation structure and what you can afford to pay.

In certain limited circumstances, you’re allowed to pay less than the state minimum wage. For more information, see “Subminimum Wages” in Minimum Wage. In other circumstances, you must pay more than the state minimum wage. Several localities have their own minimum wage. For more information, see Local Ordinances Home.

You cannot ask about or rely on an applicant’s salary history to set starting pay.1

Under federal and California law, prior salary can’t justify any disparity in compensation. In addition, the California Fair Pay Act provides additional protections against discrimination in compensation. For more information, see Wage Equality - Fair Pay Act.

Instead of using salary history to set starting pay for your new hire, a best practice is to determine in advance such factors as:

• Your company's budgetary requirements;
• What the job is worth;
• Seniority issues; and
• Your potential salary range for the open position.

With this advance planning, you’ll be better able to examine the potential candidate based on their qualifications for the position and negotiate within your company's salary requirements.

1. Lab. Code sec. 432.3