The trend in pay equity laws has continued to advance across the nation—from equal pay to anti-discrimination. Philadelphia, New York City, Massachusetts, Delaware, Oregon and Puerto Rico have already created their own laws surrounding equal pay and salary history over the last year. Now San Francisco becomes the latest city government to promote the issue of pay equity by banning employers from checking salary histories.
The northern California metropolis recently passed a law called The San Francisco “Parity in Pay” Ordinance. This law prevents employers from checking salary histories of applicants and potential employees in an effort to close the gender pay gap. Previous employers will also be banned from revealing the salary histories of their former employees to new potential employers. For those in violation, a penalty will be imposed. While the law will formally go into effect July 1, 2018, a warning will be issued during this probationary year. Beginning July 1, 2019, the quantifiable penalties will be imposed by the city’sOffice of Labor Standards Enforcement (OLSE): $100 for the first violation, $200 for the second, and $500 for any violations that follow.
In the meantime, the state of California is working through its own equal pay law process. California state Governor Jerry Brown previously vetoed the legislation regarding salary history because of other equal pay laws put in place in 2015, but another salary history bill has been introduced by the state legislature, receiving approval in the state assembly. It is now before the state senate.
San Francisco -based employers, now is the time to prepare. As the law goes into effect next year, it’s time to be proactive. Train your staff to refrain from requesting salary history, so future records will no longer reflect such requests. If your company is in need of managing that compliance, hire an outside agency to help. For companies outside of San Francisco, check to see where your state or city stands on this issue. Have your HR and government relations teams track the trend and how it might affect your business. It could be an issue sooner than you might expect.