San Francisco Passes Ordinance Banning Salary History Inquiries
San Francisco's Board of Supervisors has passed an ordinance that will ban employers from inquiring about an applicant's prior salary history. The Parity in Pay Ordinance, which is expected to be signed into law shortly by the City's Mayor, will become operative July 1, 2018.
The stated purpose of the Ordinance is to narrow the wage gap between men and women, by eliminating the practice of setting current pay rates based on prior pay rates that reflect historical gender pay differentials. The Ordinance will apply to any person applying for employment where the work will be performed within the geographic boundaries of San Francisco (including temporary or seasonal work, part-time work, contracted work, and work through a temp agency) and whose application, in whole or in part, will be solicited, received, processed, or considered in San Francisco.
The Ordinance will prohibit employers from (1) directly or indirectly asking an applicant about his or her salary history, (2) considering an applicant’s salary history in making hiring decisions, or (3) considering an applicant’s salary history in deciding what salary to offer the applicant. However, if the applicant voluntarily and without prompting discloses his or her salary history, the employer may consider that information in setting the applicant’s salary (recognizing, of course, that under California’s Equal Pay Act, salary history by itself cannot be used to justify paying an applicant less than employees of another gender or race for doing substantially similar work).
There will of course be monetary penalties for non-compliance and the threat of civil litigation. The City's Office of Labor Standards Enforcement will enforce the Ordinance, and will publish Notices regarding the Ordinance that employers will need to post in the workplace.
Employers should also keep in mind that the California Legislature is considering a similar statewide law that would ban salary history inquiries of applicants. That bill, AB 168, was passed by the California Assembly and is making its way through the Senate. It remains to be seen whether the bill will pass the Senate and/or be signed into law by the Governor. Stay tuned.