Articles

Employer Alert: San Francisco Limits New Hire Questions

August 02, 2017

by Christine H. Long

In 2018, Employers have more restrictions on the interview process if they are hiring or conducting business in San Francisco. San Francisco just enacted a law that prohibits employers from asking applicants about their salary history. The law will become effective July 1, 2018.  The “Parity in Pay Ordinance” prohibits San Francisco employers from using an applicant’s salary history in the hiring process or in determining what salary to offer an applicant.  The City stated the need for the Ordinance because in their view there is a “historical patterns of gender bias and discrimination repeat themselves” when employers consider applicants’ salary history in setting new hires’ salaries.

The ordinance defines an “applicant” as a person applying for a job to be performed in the geographic boundaries of the city and whose application, in whole or part, will be processed or considered, whether or not through an interview, in the city.  An “employer” is any individual, firm, corporation, partnership, labor organization or other organization that is or should be registered to do business in the city.

What Is Prohibited Under the Ordinance

Under the San Francisco Ordinance and Employer cannot:

  • Directly or indirectly inquiring about an applicant’s “salary history” using any mode of communication, including application forms and interviews.  The ordinance defines “salary history” as the applicant’s current and past salary (compensation, commission, and/or benefits) in the applicant’s current position or in a prior position.
  • Considering an applicant’s salary history as a factor in determining what salary to offer an applicant. This applies even if the applicant voluntarily discloses his or her salary to the potential employer.
  • Refusing to hire, disfavoring, injuring, or retaliating against an applicant for not disclosing his or her salary history.
  • Releasing a current or former employee’s salary history to another employer without the employee’s written authorization.

An applicant may voluntarily disclose his or salary after an employer’s initial salary offer in order to negotiate a different salary. However, it is the fourth restriction, not releasing a salary without consent, that will be one for many employers to navigate as they get many calls to verify income and employment.

Implementation and Enforcement

The ordinance becomes effective on July 1, 2018.  The city’s Office of Labor Standards Enforcement (OLSE) is authorized to investigate possible violations and enforce the ordinance.  An employee, applicant, organization or other person may report suspected violations to the OLSE.  When the OLSE finds a violation has occurred, it may issue a warning and notice to correct or a penalty of $100, $200, or $500 (depending on whether it is a first of subsequent violation).  OLSE may issue these penalties beginning on January 1, 2019.

What to Do?

Employers should review their policies and practices, including their interview forms and applications before 2018, to ensure they conform to the San Francisco Parity in Pay Ordinance’s requirements. If you have Employees in multiple jurisdictions, ensure that you have San Francisco forms that comply with their unique set of Ordinances.

 

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If you have any questions about how this development may impact your business, please contact Christine H. Long, Employment Law Department Chair, at christine.long@berliner.com or (408) 286-5800.