Isn't there an even bigger loophole, where a non-California recommendation company can recommend hire/not-hire and suggest a salary. The hiring company never looks it up, the non-California company does, but they never give the information to the company so the company never violates the law. Of course, you'll have to wrap it up a little better (have the verification company also check skill sets and such), but effectively all you have to do is outsource the vetting process to somewhere outside of California to get around this.