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Attorneys

San Francisco Adopts the “Parity in Pay” Ordinance – No More Inquiries About or Disclosures of Prior Salary

July 24 2017

By Beth V. West

On July 19, 2017 Mayor Lee signed the Parity in Pay Ordinance.   Below is a brief summary of the Ordinance which will go into effect on July 1, 2018.

  • The Ordinance provides findings from the 2015 United States Census Bureau report that show that in San Francisco women are paid on average 84 cents for every dollar a man makes. 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. The Ordinance finds that the problematic practices of seeking salary history from job applicants and relying on their current or past salaries to set employees’ pay rates contribute to the gender wage gap by perpetuating wage inequalities across the occupational spectrum.
  • The Ordinance shall cover all Applicants within the geographic boundaries of the “City” (which is defined as both the city and county of San Francisco) and whose application, in whole or part, will be solicited, received, processed or considered, whether or not through an interview, in the City. However, the ordinance will not apply to a person applying for employment with their current employer.
  • “Employers” covered by the Ordinance include: any individual, firm, corporation, partnership, labor organization, group of persons, association, or other organization however organized, which is or should be required to be registered to do business in the City. Job placement and referral agencies and other employment agencies are also covered. Except for the City, other local, state and federal employers are not covered.

Prohibitions under the Ordinance.

  • An Employer shall not consider or rely on an Applicant’s Salary History as a factor in determining whether to offer employment to an Applicant or what Salary to offer an Applicant.
  • An Employer shall not inquire about an Applicant’s Salary History.
  • 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 unless the release of Salary History is required by law, is part of a publicly available record, or is subject to a collective bargaining agreement.
  • “Salary” means an Applicant’s financial compensation in exchange for labor, including but not limited to wages, commissions, and any monetary emolument.
  • “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. Salary History does not include any objective measure of the Applicant’s productivity such as revenue, sales, or other production reports.
  • Where an Applicant voluntarily and without prompting discloses Salary History to a prospective Employer, or provides written authorization for such information to be disclosed from a former employer, nothing in the Ordinance prohibits the Employer from considering that voluntarily disclosed Salary History in determining Salary for such Applicant or verifying such Applicant’s Salary History. However, Salary History by itself shall not be used to justify paying any employee of a different sex, race or ethnicity less than such Applicant or prospective employee for doing substantially similar work under similar working conditions in accordance with California Labor Code section 1197.5.

Notice and Posting Requirements.

  • Before the Ordinance goes into effect in July 2018, the San Francisco Office of Labor Standards Enforcement (OLSE) shall publish and make available to Employers in English, Spanish, Chinese, and all languages spoken by more than 5% of the workforce in San Francisco, a notice suitable for posting by Employers in the workplace informing Applicants and employees of their rights under the Ordinance.
  • Employers must post the OLSE notice in a conspicuous place at every workplace, job site, or other location in the City or on City property under the Employer’s control and frequently visited by their employees or Applicants, and shall send a copy of the notice to each labor union or representative of workers, as applicable.

Enforcement and Penalties.

  • From July 1, 2018 through June 30, 2019, the OLSE will issue a warning and notice to correct if the Ordinance is violated.
  • Starting July 1, 2019, for any subsequent violation other than a first violation (including a first violation occurring before that date), the OLSE may impose an administrative penalty of no more than $100 that the Employer must pay to the City for each employee or Applicant to whom the violation occurred. Thereafter, for subsequent violations occurring within 12 months of that violation, the penalty may increase to no more than $200 for the second violation, and to no more than $500 for each additional violation. The penalty shall be payable to the City for each employee or Applicant whose rights were violated.
  • The OLSE may also initiate an administrative action against an Employer. Before the effective date of the Ordinance in July 2018, the OLSE will establish rules and procedures for the administrative process. The OLSE may also refer matters to the City Attorney who may initiate a civil action.

More details regarding the Parity in Pay Ordinance can be found at: https://sfgov.legistar.com/View.ashx?M=F&ID=5282302&GUID=9B58E3DF-EBD7-46FC-BFFB-32E073CFF9E0