Save Me! San Francisco Enacts Salary History Law
Following the lead of other states and cities, on July 19, 2017, San Francisco Mayor Ed Lee signed the “Parity in Pay Ordinance” into law. The Ordinance, which takes effect on July 1, 2018, prohibits San Francisco employers from asking job applicants about their salary history or from considering earnings information in determining whether to hire an applicant and what salary to offer them.
The stated purpose of the law is to narrow the salary gap between men and women in the city. According to the Findings in the Ordinance: “In San Francisco, women are paid 84 cents for every dollar a man makes, according to the 2015 United States Census Bureau report. Women of color are paid even less. African American women are paid only 60 cents to each dollar paid to men. Latinas are paid only 55 cents to each dollar paid to men.”
“Salary” is defined as “an applicant’s financial compensation in exchange for labor, including but not limited to wages, commissions, and any benefits.” “Salary History” means “an Applicant’s current and past Salary in the Applicant’s current position, or in a prior position with the current Employer or a prior Employer.” “Inquire” means any direct or indirect statement, question, prompting, or other communication, orally or in writing, personally or through an agent, to gather information from or about an Applicant, using any mode of communication, including but not limited to application forms and interviews.”
The Ordinance includes the following prohibitions:
- An Employer shall not Inquire about an Applicant’s Salary History.
- An Employer shall not consider an Applicant’s Salary History as a factor in determining what Salary to offer an Applicant. This prohibition applies even if, absent an Inquiry from the Employer, the Applicant discloses Salary History to the Employer.
- An Employer shall not refuse to hire, or otherwise disfavor, injure, or retaliate against an Applicant for not disclosing his or her Salary History to the Employer.
- An Employer shall not release the Salary History of any current or former employee to that person’s Employer or prospective Employer without written authorization from the current or former employee.
The Ordinance does not prohibit an Applicant from voluntarily disclosing Salary History following an Employer’s initial salary offer in order to negotiate a different salary or prohibit an Employer from considering that applicant’s Salary History in determining a counter-offer.
The Ordinance will be enforced by the Office of Labor Standards Enforcement. When a violation has occurred, OLSE may issue a warning and notice to correct or a penalty of $100, $200, or $500. Penalties for violating the law begin on January 1, 2019.
Arent Fox’s Labor & Employment group will continue to monitor developments in this area. If you have any questions, please contact Michael Stevens in the Washington, DC office, Robert Carrol or Paul Lynd in the San Francisco office, or the Arent Fox professional who regularly handles your matters.