United States: New San Francisco Ordinance Would Ban Employer Inquiries Into Salary History

In an effort to close the gender gap and remedy pay disparity, the Board of Supervisors for the City and County of San Francisco passed the Parity in Pay Ordinance on July 11, 2017. The new law will prohibit employers, including city contractors and subcontractors, from asking applicants about their salary history, from disclosing an employee's salary without permission, and from considering salary history in determining whether to offer employment to an applicant or what salary to offer. [Note: The ordinance was signed into law by Mayor Lee on July 19, 2017.]

San Francisco is the latest jurisdiction to enact a "pay parity" law, joining Philadelphia, New York City, Massachusetts, Maryland, Oregon and Delaware in prohibiting an employer's inquiries into a job applicants' salary history during the application process. The San Francisco ordinance is consistent with other efforts in California and around the nation to address pay disparity by gender. Under the California Fair Pay Act, salary history alone cannot be used to justify paying an employee differently for doing substantially similar work under similar working conditions. A bill banning salary history inquiries has been considered by the State of California, but has not yet become law. Similar bills are pending in Pennsylvania and New Jersey.

Forbidden Practices and New Requirements

San Francisco's new Parity in Pay Ordinance is premised on the theory that the practices of seeking salary history from job applicants and relying on their current or past salaries to set pay rates perpetuates wage inequalities across the occupational spectrum.

The ordinance would ban employers from asking job applicants about prior salary history. The ordinance would also forbid employers from disclosing any employee's salary history without the employee's written authorization, with certain exceptions relating to rates set by collective bargaining agreements, information contained in the public record or legal requirements. In addition, the ordinance contains anti-discrimination and anti-retaliation components, as an employer may not refuse to hire or otherwise disfavor, injure or retaliate against an applicant for not disclosing his or her past pay history to the employer.

The new law would take effect 30 days after it is enacted, authorizing the Office of Labor Standards Enforcement ("OLSE") to begin implementing the law and developing enforcement rules. The OLSE may impose warnings and notices to correct beginning on July 1, 2018, and may impose monetary penalties beginning on July 1, 2019. It would apply to all private employers required to be registered to do business in the City of San Francisco, regardless of size or industry, including job placement, referral and employment agencies. The ordinance would extend to applicants whose work would be performed in whole or in part in San Francisco for at least eight hours per week. With some exceptions, the law would also apply to applicants for employment with private employers when the applicant's work would be performed under a contract with the City and County of San Francisco or when the work would be performed in the city or on city property. City contracts and subcontracts must contain express provisions relating to the new law. The law would require posting in multiple languages.

Civil Penalties, Contract Deductions and Administrative Action

Job applicants and employees may report violations. Although the ordinance does not call for a private right of action by injured applicants, violators are subject to monetary penalties and potential civil action by the city. Further, the ordinance permits San Francisco to terminate or suspend city contracts or deduct penalties from amounts payable to city contractors or subcontractors.

What This Means for Employers

Under the ordinance, employers can ask about an applicant's salary expectations, including unvested equity, deferred compensation or bonuses that an applicant would forfeit by resigning from current employment. Voluntary disclosures by an applicant – and their subsequent consideration by an employer – are permitted, so long as the employer complies with the California Fair Pay Act and does not use salary history alone to justify lower pay for an employee of a different sex, race or ethnicity.

If the new law is enacted, employers in San Francisco, including those who contract or subcontract with the City and County of San Francisco, should remove from their applications for employment any reference to wage history and should not inquire about it during the interview or hiring process. If another law or regulation specifically authorizes employers to ask certain applicants about their wage histories, a separate application with an appropriate question consistent with those other legal requirements should be developed. Recruiting and hiring managers and others involved in the hiring process should be trained on the new obligations of the law.

Employers conducting background checks should proceed with caution. If such checks disclose prior pay, it should not be considered for purposes of determining the applicant's future salary or whether to offer the job to the applicant. Employers should also be aware that the new ordinance not only bans employers from asking direct questions about current and past compensation, but also from prompting oral or written communications about prior pay, either personally or through an agent. Those who contract with the City and County of San Francisco and who retain subcontractors to perform work on such jobs should make sure their contracts contain required language.

Employers should post the required notice when it becomes available.

For Further Information

If you have any questions about this Alert, please contact any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are in regular contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.