Taking effect July 1, 2018, San Francisco’s Consideration of Salary History Ordinance, also known as the Parity in Pay Ordinance, will ban employers from considering the current or past salary of an applicant in determining whether to hire the applicant or what salary to offer the applicant. The San Francisco ordinance is similar to the new California Salary History Ban law.
The ordinance applies to any employer required to register to do business in San Francisco, including job placement, referral and other employment agencies. A parallel ordinance applies to employers that are contractors or subcontractors with the City of San Francisco. The ordinance does not apply to any local, state or federal government except the City of San Francisco.
Applicants who apply for employment to be performed in the geographic boundaries of San Francisco and whose application, either in whole or part, will be solicited, received, processed or considered in San Francisco are covered. Applicants applying for employment with their current employer are not covered under the ordinance.
Employers covered by the ordinance are prohibited from doing any of the following:
- Inquiring about an applicant’s salary history, whether directly, indirectly, personally or through an agent, including application forms or interviews.
- Considering or relying on an applicant’s salary history as a factor in determining whether to hire an applicant or what salary to offer an applicant.
- Under the ordinance, while an employer is allowed to consider salary history when an applicant discloses it voluntarily and without prompting, salary history alone cannot justify a pay disparity between employees of different sexes, races or ethnicities who perform substantially similar work. However, under state law, salary history cannot justify a pay differential. Therefore, employers may not consider prior salary, even if it was voluntarily disclosed by the applicant.
- Refusing to hire or retaliate against an applicant for not disclosing his/her salary history.
- Releasing a current or former employee’s salary history to a prospective employer without written authorization from the current or former employee (subject to limited exceptions).
San Francisco employers will be required to post a notice informing employees of their rights under the ordinance. The notice must be posted in a conspicuous place at every workplace and jobsite in San Francisco in English, Spanish, Chinese and any other language spoken by at least five percent of the employees at the workplace, job site or other location where it is posted. Employers must also send a copy of the notice to any labor union representing its employees in San Francisco.
The San Francisco Office of Labor Standards Enforcement (OLSE), the agency to enforce the ordinance, will only issue a warning and notice to correct an employer’s first violation and for any violation that occurs from July 1, 2018, through June 30, 2019. Starting July 1, 2019, the OLSE may impose administrative penalties on employers for violations other than a first violation. The OLSE may also refer the action to the City Attorney, who may initiate a civil action for violations of the ordinance.
The OLSE is required to issue rules interpreting the ordinance before July 1. More information about the Consideration of Salary History Ordinance can be found on the OLSE’s website.
Bianca Saad, Employment Law Subject Matter Expert